How to increase ARPU in 4th quater

[sashank19]

Carriers reported 4th Qtr. results with increase in subscriber additions but lower ARPU. Carriers are focused to increase data networks in order to bolster their ARPU's given currently only less than 10% of revenue are coming from this area. Wireless market penetration in the US is approaching 70%.

What can you suggest for carriers to plan an ARPU increase come 4th Qtr 2006?


Thanks

Sashank

[JR1]

It would be nice if they first had better coverage in areas such as mine.
And next, high speed wireless would be great. We have edge here but it doesn't do much for me.

Streaming news that is available on the motorola v557 would be great for all their phones.

[JR1]

Oh and I forgot....staff that know what they are selling. Its a shame that I know more about wireless phones and technology than those that try to sell it to me. I know more about the phones when I go into a store than the sales staff do. I work in health care....not wireless phones. Can someone say good customer service...HELLO

Train those people and also have them tell the customers the options they have. I always have to ask about new services such as cingular world connect and plans for text messaging and the like.

[bobolito]

Lower data prices. If data prices are high in the sky, nobody is going to add them to their current accounts and stay with voice plans alone. However, I am willing to pay $10 extra in my bill given a decent data offer. Currently, a decent data offer does not exist. Think of all the people that will do the same, hence boosting ARPU.

[sashank19]

is there any way to increase the ARPU without focusing much on the data services where the penetration is only 10%.

thank you

[bobolito]

Cingular has taken measures to increase ARPU on the voice side, but it has been fruitless. They have cut down the voice plan options to drive you to choose a higher priced plan and have modified Rollover policies to encourage you to stay on a higher voice rate plan. They have also cut down the options for family plans and raised the minimum for family plans so you have to pick a high rate plan anyway. But voice service has already given everything it will in terms of revenue maximization due to competition and customer expectations are already too mature. The next step is data. They should forget about tweaking voice plans and focus on getting people to use data. So far, they have started to offer a great variety of services that use data such as Mobile Email, IM, Video and audio downloads which is all great, but all at prohibitive prices. People are not going to even try them unless prices are reasonable and that won't allow ARPU to grow.

[ZaphodB]

One option would be to have an "all-inclusive" plan, where what you sign up for is what you pay, and it includes all fees, taxes and government surcharges. With an appropriate advertising campaign, you could also sneak in a rise in rates that would increase ARPU slightly. SaskTel in Canada did this several years ago, but their advertising was terrible. You want to get a copy of a competitor's bill and say "Your $59.99 plan from Cingular actually costs $72.30 a month. Get 1000 minutes from Verizon for $65.99 and not a single penny more."

Bobolito is right, though, voice has given all it's going to give. People tried PTT, but Sprint Nextel has that market all sewn up. Hoping for people to overestimate their appetite for minutes has gone by the wayside as more people are actively auditing their use. The only voice-side thing I could see pushing was competitive international-dialling rates, targeted at the same audience as phone cards. Offer good rates to Mexico, the Philippines, Central America, the Caribbean, India, and Southeast Asia and you might increase ARPU in one segment of your subscriber base.

[bobolito]

Speaking of international use, if roaming charges weren't so obscene, people would simply pay for the convenience of having the same US number when they travel overseas. But most people prefer to unlock their phones and buy a prepaid SIM overseas. So Cingular doesn't get a penny from that. If roaming rates were reasonable, that revenue would not go to the international prepaid SIM vendors.

[JR1]

I agree. Cheaper international roaming would be nice. I have an unlocked phone and it is so cheap when you buy a prepaid sim in europe and the calls are only pennies.

Last year I bought the cingular world connect plan and it costs 0.99 cents a minute per call while roaming there. I'd love to keep my own number instead of having to used the prepaid sim but 0.99 cents a minute is pretty expensive.........

[Shizuka]

I desagree with the idea that cheaper roaming charges and/or international dialing will do for a better 4Q ARPU. Im also not so sure there are other ways to increase ARPU without focusing on DATA. Lower-revenue customers enters the highly penetrated markets, resulting in lower voice based ARPU. As Cingular reports:

ARPU from data services continued its strong growth in the fourth quarter of 2005, increasing 63 percent to $4.71 compared to fourth quarter of 2004 and 9 percent compared to the third quarter of 2005. This growth was spurred by the increasing popularity of downloadable games, ringtones, mobile instant messaging, mobile email, photo messaging, and media bundles. In addition, text messaging continued to grow. In the fourth quarter of 2005, Cingular had nearly 24 million active data customers, and delivered 72 million multi-media messages and 6.1 billion text messages.

6.1 billion text messages? And thats only on a 10% Data penetration service.

How to increase ARPU? Focus on DATA. More customers avoid using precious peak-time minutes by just sending a TXT or MMS. I agree with JR1 Cingular needs to promote Data services in every single call customer service reps receive and in every customer that retail reps faces. If the customer is not aware of Games, Chat, News, Sport Scores, Dating services, Financial quotes, AOL - Yahoo - MSN mail, their options to increase data usage is limited.
Maybe data prices are prohibitive for some customers, but once you hook them with a great service, they'll buy it. Keywords = "Great Service".

For me it doesn't make sense that new rate plans with more minutes at a lower cost will increase ARPU. It doesn't make sense also that all of a sudden Cingular customers will start talking lots more with whoever and they will upgrade their rate plans.