ARPU is growing, but the subscriber is drying up.

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Shishirgano9
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Joined: Thu Dec 05, 2024 4:54 am

ARPU is growing, but the subscriber is drying up.

Post by Shishirgano9 »

What is more important – a large subscriber base or good ARPU? Quantity or quality? The answer to this question seems obvious: good ARPU, of course. But we are for a reasonable compromise. And here’s why.

If you remember, in the early 2000s, when cellular communications were united kingdom phone number library more of a luxury than a means of communication, a discount was given on a mobile phone if it was purchased with a SIM card. The future "Big Three" were increasing their subscriber base, it was a natural, evolutionary process that lasted for many years. For a long time, competition for the subscriber base was, roughly speaking, the main condition for the survival of operators in the market: budgets were calculated and advertising campaigns were conducted for it. The fight for the client resulted in outright dumping, the consequences of which operators are still suffering.

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The active growth of the “subscriber base” – or more precisely, SIM card penetration – continued even when there was no longer a need for it. As a result, by the end of 2014, according to AC&M, there were on average 2.16 SIM cards per subscriber in St. Petersburg (including infants and the elderly), and 2.12 in Moscow. This is despite the fact that smartphones with dual-SIM functionality were not yet so popular. It became obvious that quantity does not automatically translate into quality; many registered SIM cards were hanging like dead weight.

The concept of ARPU (average revenue per user) comes to the fore, and a sharp turnaround in all operator business processes occurs. By chance, it coincided with the global trend associated with IT optimization of everything and everyone – and fits in well with it. Today, there is no doubt that the quality of the subscriber base is much more important than its volume. But the all-out race for ARPU is another extreme, no less destructive than providing services to “dead souls”.

Let's start with the fact that with the development of cellular communications, its perception by subscribers, their needs and, most importantly, their intelligibility are changing. But this was not the reason for operators to improve subscriber service - there are more pragmatic reasons. Firstly, the value of a number tied to a specific operator, with the introduction of the MNP rule, ceased to be a deterrent to churn. In the current situation, only loyalty could become such a factor - and the quality of cellular communications in Russia was really high. At least in St. Petersburg and Moscow. Secondly, the modernization of base stations, improvement of service and generation of new services became excellent justifications for raising tariffs.

At the same time, a new generation of players has appeared on the mobile communications market: MVNO operators. An ambiguous situation has arisen, when traditional operators suffer from an inflated subscriber base, and young ones have to create this base from scratch. But, since MVNO cannot compete with traditional operators either in terms of coverage or network quality, the development of additional services is again being used. It would seem that, no matter how you look at it, ARPU is the optimal indicator of efficiency. However, it is not that simple.

Firstly, the ARPU indicator is not as objective as it is commonly thought. It is tied to many parameters, both positive (for example, loyalty, receptivity to new services) and negative (increasing tariffs, imposing services). Secondly, these parameters, like any statistical data, are easy to manipulate - especially if you need to report to the Board or defend a project. And if the performance indicator becomes an object for paper manipulation, the efficiency itself fades into the background.

Let's recall, for example, one of the first "black" Tele2 package tariffs, which appeared immediately after the launch of the 3G network operator: 90 rubles/month against 180 rubles/month and more from competitors was an unprecedented step. This tariff did not last long, only a few months. Today, Tele2 tariffs are not particularly price attractive, although the operator swore to remain a mobile discounter. Other players use similar techniques, forcing subscribers to switch from inexpensive archive tariffs to "new lines", connecting paid additional services, etc. Social engineering is used: advertising convinces the subscriber that due to his own increased needs - in traffic, mobile Internet speed - he should pay more. The desire to extract maximum benefit from the client by any means hits the wallet, first of all, of low-income groups of the population, for whom mobile communications are again becoming a luxury. The amount of negativity directed at telecom operators in social networks exceeds reasonable limits - and they mainly concern poor service, imposed services and other options "relatively legal ways of taking money." But ARPU is growing.

An operator who learns to find a reasonable compromise between quantity and quality, to perceive a client not as a resource or a line in a report, but as an equal partner, will reach a new level of evolution. Those who believe that this is an exclusively moral issue, and therefore has nothing to do with business, are mistaken. After all, you are promoting an individual approach to the client, and an individual approach is always a partnership.

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