How to increase the ARPU operator local communications
The market of fixed-line services in Moscow is saturated, the competitive struggle for the client goes on a daily basis.
Work with legal entities with subscribers is a simple sequential process, starting with a commercial offer for the telecommunication needs of a client, negotiations and signing of contracts. Next, the client is connected, and on the operator’s side there is a setting for monitoring and recording the traffic of the connected subscriber. The result of the work is the fulfillment of obligations under the contract, namely: compensated provision of communication services.
ARPU (Average revenue per user) is an indicator that means average revenue (usually per month) per subscriber. It is one of the indicators characterizing the success of the company's business. That is why operators seek to increase ARPU, offering their customers more and more services. But with us, the local communication operator, this indicator is not increasing today.
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Having points of presence in several office centers, I would like to see the development of my business.
Analysis of telephone traffic and communication with subscribers revealed the following:
The conclusion suggests itself: in order for subscribers to use our services, it is necessary to revise tariffs for telephone communications and offer better services. To begin with, consider the pricing for local communications .
Communication services are a specific type of business. Its main feature is that a telecom operator cannot work, relying only on its own equipment and communication lines. According to the Decree of the Government of the Russian Federation No. 161 “On approval of the Rules for interconnection of telecommunication networks and their interaction,” we have a point of interconnection of communication networks at the local level with the operator VimpelCom. There are traffic transmission services, namely, activities aimed at meeting the needs of operators in traffic transmission between interconnected telecommunication networks and consisting of the following services:
Our spending on local traffic does not exceed the mandatory minimum payment for VimpelCom traffic transmission services. In addition, there is a revenue part in the form of call termination services to its network and initiating a call from its network.
Here is an approximate calculation: (Subscription fee x number of Subscribers) - (Mandatory payment - revenue, except for initiation) = Margin
Thus, we transferred about 90% of our subscribers to the “unlimited” local connection tariff with a minimum subscription fee.
Now we will consider the pricing policy for intrazonal, long-distance and international communication services . To provide these communication services there is an Agency agreement with the operator VimpelCom. Corresponding agreements have been concluded with our subscribers. The choice of the operator is carried out at each call.
Introduce an approximate calculation: (Tariff for the subscriber) - (Conventional cost - the revenue part of the initiation) = Margin
However , in order to offer a competitive price to our subscribers, it is necessary that the margin under the Agency Agreement was minimal, and in some telephone areas of the Russian Federation it was a penny!
To earn under such conditions is not profitable - you need to reduce the notional value. It was decided to choose another long-distance carrier .
The conditions for connecting telecommunication networks from MTT and MTS operators turned out to be more profitable for us than offers from other companies. But the stumbling block was the tariffs under the Agency Agreement. New rates are not much different from ours. Considering the obligatory payments under such agreements, the merger project with another long-distance operator has been suspended.
We would not like to use unpopular methods of increasing ARPU, such as: increasing subscription fees, limiting the number of minutes to local calls, obligatory payments, “barrage tariff” for services of another operator.
We are looking for a solution and we hope it will be correct and aimed at achieving commercial success.
Work with legal entities with subscribers is a simple sequential process, starting with a commercial offer for the telecommunication needs of a client, negotiations and signing of contracts. Next, the client is connected, and on the operator’s side there is a setting for monitoring and recording the traffic of the connected subscriber. The result of the work is the fulfillment of obligations under the contract, namely: compensated provision of communication services.
ARPU (Average revenue per user) is an indicator that means average revenue (usually per month) per subscriber. It is one of the indicators characterizing the success of the company's business. That is why operators seek to increase ARPU, offering their customers more and more services. But with us, the local communication operator, this indicator is not increasing today.
')
Having points of presence in several office centers, I would like to see the development of my business.
Analysis of telephone traffic and communication with subscribers revealed the following:
- Skype and other services are used to communicate with an international opponent.
- for long-distance calls, telecom operators providing services using the means of multiple access are used
The conclusion suggests itself: in order for subscribers to use our services, it is necessary to revise tariffs for telephone communications and offer better services. To begin with, consider the pricing for local communications .
Communication services are a specific type of business. Its main feature is that a telecom operator cannot work, relying only on its own equipment and communication lines. According to the Decree of the Government of the Russian Federation No. 161 “On approval of the Rules for interconnection of telecommunication networks and their interaction,” we have a point of interconnection of communication networks at the local level with the operator VimpelCom. There are traffic transmission services, namely, activities aimed at meeting the needs of operators in traffic transmission between interconnected telecommunication networks and consisting of the following services:
- local call completion service
- call transit service
- local call initiation service
Our spending on local traffic does not exceed the mandatory minimum payment for VimpelCom traffic transmission services. In addition, there is a revenue part in the form of call termination services to its network and initiating a call from its network.
Here is an approximate calculation: (Subscription fee x number of Subscribers) - (Mandatory payment - revenue, except for initiation) = Margin
Thus, we transferred about 90% of our subscribers to the “unlimited” local connection tariff with a minimum subscription fee.
Now we will consider the pricing policy for intrazonal, long-distance and international communication services . To provide these communication services there is an Agency agreement with the operator VimpelCom. Corresponding agreements have been concluded with our subscribers. The choice of the operator is carried out at each call.
Introduce an approximate calculation: (Tariff for the subscriber) - (Conventional cost - the revenue part of the initiation) = Margin
However , in order to offer a competitive price to our subscribers, it is necessary that the margin under the Agency Agreement was minimal, and in some telephone areas of the Russian Federation it was a penny!
To earn under such conditions is not profitable - you need to reduce the notional value. It was decided to choose another long-distance carrier .
The conditions for connecting telecommunication networks from MTT and MTS operators turned out to be more profitable for us than offers from other companies. But the stumbling block was the tariffs under the Agency Agreement. New rates are not much different from ours. Considering the obligatory payments under such agreements, the merger project with another long-distance operator has been suspended.
We would not like to use unpopular methods of increasing ARPU, such as: increasing subscription fees, limiting the number of minutes to local calls, obligatory payments, “barrage tariff” for services of another operator.
We are looking for a solution and we hope it will be correct and aimed at achieving commercial success.
Source: https://habr.com/ru/post/130463/
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