Arpu Aricent- White Paper

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Increasing ‘Average Revenue Per User’

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© 2008 Aricent , Inc. All rights reserved.

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CONTENTS

1. Executive Summary 2. Next Generation Technologies 3. Awareness/Educating Subscribers on Various Services and New Plans 4. Number Portability and its Impact on ARPU 5. Efficient Risk Analysis and Fraud Management Systems 6. Efficient CustomerRelationship Management 7. Optimizing Network Usage 8. Improving Quality of Service (QoS) 9. Efficient Reporting Tools and Models for Timely Decision Making to bring-in Innovative Marketing Plans 10. Conclusion

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1. EXECUTIVE SUMMARY In a competitive mobile telecommunications industry, service providers are always looking for ways toincrease their average revenue per user (ARPU). Regulators and industry watchers, world over, use ARPU to compare the performance of the players in the industry. Under the new European Union electronic communications regulatory framework, some national regulatory authorities have linked higher ARPU with significant market power. Regulatory barriers and spectrum allocation issues are delaying thedeployment of 3G services in markets like India and China. Fixed-line service providers face the dual challenge of declining fixed-line revenues and increasing fixed-to-mobile substitution. Innovative value-added services and lower price points are key differentiators in the fixed-line telephony segment. Fixed-line service This paper examines the determinants of ARPU in a systematic way, taking accountof market environment, regulation and quantity of service. The robust results suggest that concentration may not be a reliable indicator of competition in mobile markets; there are economies of density in mobile markets; and higher GDP per capita increases the ARPU of the service provider. The rise of instant messaging (IM) gave us buddy lists and the concept of presence (i.e. knowing when your IMbuddies are online or offline), the rise of mobile-based IM and technologies like GPS are adding location to the mix. 2. NEXT GENERATION TECHNOLOGIES As Internet Protocol (IP) technology becomes more pervasive in the telecommunications industry, next-generation services are increasingly driving growth in the consumer market. Although regulatory constraints and dwindling fixed-line revenues arekey challenges for service providers, renewed focus on 3G services, convergence, and multimedia should enable them to stay ahead of competition. Sprint is the only service provider in the US, to launch a mobile-based buddy finder. Korea's SK Telecom launched a "Find Friends" service way back in 2000, and Japanese carriers like NTT DoCoMo and KDDI have similar offerings. In the US, Verizon...