This document discusses various use cases and analyses for a telecom company, including subscription activation and termination, CRM and billing, revenue segmentation by service and customer, customer churn analysis and reasons for churn, customer profiling, calculating average revenue per user (ARPU) and the shift to average revenue per account (ARPA), segmentation of postpaid and prepaid customers, analyzing tariff plan changes, and how customer segmentation can benefit operators by maximizing revenue and retention.

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Use Case - 6
Case Study on Telecom
Subscription, churn and
ARPU Analysis
Ankush Roy
Anurag Shandilya
Koushik Rakshit
Roma Agrawal

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Contents
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 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

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Subscription Activation
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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.

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Subscription Termination
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 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.

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CRM and Billing
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 CRM/OMOF (Order
Management & Order
Fulfillment)
 Provisioning System
 NIS (Network Inventory
System)

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Revenue Segmentation
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Service Wise

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Revenue Segmentation
Customer 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.

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Customer Churn
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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 Churn
2)Non-Voluntary Churn

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Other Reasons
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Churn Management
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Customer Profiling
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Average Revenue per User (ARPU)
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 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.

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ARPU -> ARPA
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 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.

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Postpaid Customer Segmentation
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Segmentation leads to Higher revenues
Postpaid Customer Segmentation

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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)

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Tariff Plan Change Report
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 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

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Customer Segmentation
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Clustering
Profiling
Customers
Revenue
Max

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Operator Benefits
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Customer retention leads to Profit Maximization

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Use Case - 6