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Abstract
Valuable though they may be, is the telecoms industry getting bogged down with using fiscal measurements almost exclusively, at the expense of considering the broader business picture? The rise of packet-based services has introduced a whole range of new considerations for operators as margins on these services can vary greatly. The priority for operators then, is to use KPIs in a business context at all times, to measure customer and service margins, make effective business decisions and offer exciting customer propositions to drive the business forward.
Distorted views
Undoubtedly, revenue-based indicators like ARPUs are useful financial measurements for traditional core services (such as voice and SMS). But with the introduction of packet-based services, a different approach is needed. If financial performance calculations are based solely on revenues, there is a danger that operators will have a distorted view of their business, as these services vary considerably in their bandwidth consumption, infrastructure costs, billing models and cross-charging requirements. For example, although the cost for a customer to send a multimedia message is higher than the cost of sending an SMS, the operator may make more margin on an SMS message.
Maximising customer margin
This scenario is influencing the increased use of AMPU as a Key Performance Indicator (KPI)...