Is it time to redefine ARPU?
Author: Luke Taylor CCO & Deputy CEO
Date: 19th January 2017
Categories: Technology, Financial, Telecoms, Revenue Assurance, Fraud protection, Optimus, Neural Technologies, Revenue Management, ARPU
ARPU (Average Revenue per User) has been a term used in the telecommunications industry for many years now. Every financial statement and report published by any CSP today to its shareholders and investors will now include amongst the usual profit and loss numbers and operating figures, the essential term ARPU - Average Revenue per User. But does this term now truly represent the role of the CSP in today’s environment?
Things have clearly changed, CSPs do not only provide simple voice and text messaging, the myriad of services an individual subscriber can undertake has steadily increased year on year, consumers and the world we live in has demanded more from the CSP. Gone are the days of CSPs selling minutes of use. CSPs are investing in transforming themselves with technology that enable them to take revenue beyond connectivity and consumers into revenue from solutions that solve customer business challenges. CSP do not only provide services to individual subscribers, there are now many IoT service providers for example – most cars have now some form of connection, as well as appliances, wearables, smart homes, etc. This will change the dynamics of CSP’s moving forward.
This evolution in the CSP business model will mean the annual financial statements will need to change and adapt accordingly. This change may necessitate a much larger and more complex accounting requirement in the future. It is now not only the individual subscriber that can attribute to ARPU, it is many different and diverse entities in many different industries inbuilt into products that will generate revenue.
OK, it is a trivial matter but also a trivial change… So I hope to see a migration to the term – ‘Average Revenue per Unit’ in the coming months and the word ‘User’ disappear as do the traditional services CSP’s used to offer in the early days of telecommunications. Wikipedia has already reflected the word, Unit in their interpretation of ARPU, but I hope it can go further by taking the word out entirely…