03/19/15 1

Use Case - 6

Case Study on TelecomSubscription, churn and

ARPU Analysis

Ankush RoyAnurag ShandilyaKoushik RakshitRoma Agrawal

LOGO

Contents

03/19/15 2

Subscription Activation Subscription Termination CRM and Billing Revenue Segmentation Customer Churn Customer Profiling Average Revenue per User (ARPU) Postpaid Customer Segmentation Prepaid Customer Segmentation Tariff Plan Change Report Customer Segmentation on Tariff Operator Benefits

LOGO

Subscription Activation

303/19/15

The SDSS Subscription Server essentially links your Web Server to SDSS Registration and Subscription Processing in order for users to be able to securely sign up for paid and/or unpaid subscriptions to your video, content or application.

LOGO

Subscription Termination

403/19/15

Subscriber is liable to immediately pay any and all outstanding charges

Globe reserves the right to issue a supplemental billing after the termination of the Service in the event that there are fees or charges that have not been included yet in the Statement of Accounts previously sent to Subscriber.

Any deposit or advance payment by Subscriber shall be applied to any outstanding amount due to Globe as of the termination date.

LOGO

CRM and Billing

503/19/15

CRM/OMOF (Order Management & Order Fulfillment)

Provisioning System

NIS (Network Inventory System)

LOGO

Revenue Segmentation

603/19/15

Service Wise

LOGO

703/19/15

Revenue SegmentationCustomer Wise

The biggest challenge in this approach is deciding how to identify customer needs.

One of the most interesting techniques that help to understand

the true composition of the customer base is to start with mathematical clustering of customer base by its behavior.

When using this technique in prepaid, cluster the base using the metrics that are easy to interpret and clearly describe customer behavior.

As an example: number of outgoing calls, number of incoming calls, number of outgoing text messages, number of incoming text messages, number of data sessions, number of megabytes downloaded, number of outgoing international calls.

LOGO

Customer Churn

803/19/15

Churn:Term used to describe customer attrition and loss

Churn Rate:The number of participants who discontinue their use of a service divided by the average number of total participants during a period

In India, we have monthly churn rate of 5-6%

Churn Types:1)Voluntary Churn2)Non-Voluntary Churn

LOGO

903/19/15

LOGO

Other Reasons

1003/19/15

LOGO

Churn Management

1103/19/15

LOGO

Customer Profiling

1203/19/15

LOGO

Average Revenue per User (ARPU)

1303/19/15

A measure of the revenue generated per user or unit.

Average revenue per unit allows for the analysis of a company's revenue generation and growth at the per-unit level.

It help investors to identify which products are high or low revenue-generators.

ARPU measure is most often used in the telecommunications sector to survey the amount of revenue generated per cell-phone user.

LOGO

ARPU -> ARPA

1403/19/15

Recently there have been various industry recommendations to switch from ARPU, average revenue per user, to ARPA, average revenue per account.

ARPU is inherently focused on an individual using telecom services. But device penetration rates exceeding 100% indicate individual users are carrying multiple devices; each device could have a different type of plan and different data rates as well.

This complexity can confuse what ARPU means to carriers, hence the consideration of a switch to ARPA as a primary measure of unitized revenue.

LOGO

Postpaid Customer Segmentation

1503/19/15

LOGO

1603/19/15

Segmentation leads to Higher revenues

Postpaid Customer Segmentation

LOGO

1703/19/15

Prepaid Customer Segmentation

On the basis of Usage Profiles

On the basis of Customer Lifecycle

On the basis of Customer Value

On the basis of Recency, frequency and Monetary (RFM)

LOGO

Tariff Plan Change Report

1803/19/15

The Telecommunication Tariff Order (TTO) 1999, issued by regulator (TRAI), had begun the process of tariff balancing with a view to bring them closer to the costs. This supplemented by Calling Party Pay (CPP), reduction in ADC and the increased competition, has resulted in a dramatic fall in the tariffs. ADC has been abolished for all calls w.e.f. 1st October 2008.

The peak National Long Distance tariff for above 1000 km in 2000 has come down from US$ 0.67 per minute to US$ 0.02 per minute in 2009.

The International Long Distance tariff from US$ 1.36 per minute in 2000 to US$ 0.16 per minute in 2009 for USA, Canada & UK.

The mobile tariff for local calls has reduced from US$0.36 per minute in 1999 to US$ 0.009 - US$ 0.04 per minute in 2009.

The Average Revenue Per User of mobile is between US$ 5.06 - US$ 7.82 per month

LOGO

Customer Segmentation

1903/19/15

ClusteringProfiling

CustomersRevenue

Max

LOGO

Operator Benefits

2003/19/15

Customer retention leads to Profit Maximization

03/19/15 21

Use Case - 6