How subscriber analytics are laying ARPU to rest

Average revenue per user (ARPU) has long been the benchmark metric in the wireless industry with fortunes gained and lost on even small changes in an operator’s ARPU result. However, ARPU was borne from a wireless age when voice, postpaid and subscriptions were the dominant drivers of success, and the past couple of years have seen the wireless industry go through dramatic changes. One evolving result of these changes has been to make ARPU increasingly irrelevant as a measure.

Mature markets today are seeing over 100 percent penetration, a clear indicator of the trend toward people carrying multiple wireless devices. This trend will progressively reach more mainstream consumers as everyday products are becoming wirelessly enabled, such as e-readers, GPS devices and cameras. In this environment, the concept of ARPU starts to lose constructive meaning as it only describes one facet of what has fast become a multifaceted interaction between the user and the operator.

Guavus’ big data analytics solutions enable operators to take data from various different sources, fuse it together, correlate it and identify valuable insights that can be generated from the data. As these operators gain greater expertise and experience in utilizing these analytics, they can then use intimate customer knowledge to take a broader view of actual subscriber revenue performance.

This shift in market and technology dynamics is creating a death knell for the ARPU metric but breathes life into a much more precise revenue model where operators can identify and prioritize customers by profitability through a rich suite of subscriber analytics.