July 27, 2008 9:43 AM BST
Now it makes perfect sense to me.
Especially a roaming subscriber may quite easily become non-profitable for the operator, considering that the roaming agreements keep changing often and are outside the circle of influence of the operator. The billing systems of the operator on the other hand dont keep up with these changes resulting in a stage when the subscriber could become non-profitable.
So a study like yours can surely be of value.
One question here to be answered quickly is again when we are measuring the profitability. Profit = Price - Cost. Taking this simple equation on the cost side, what are the things we will need to consider.
1) An amortized cost of the network ( in case of offnet this is easy as this is the roaming agreement Inter operator tariff per type of call the subscriber is allowed). So in offnet cases this is a very easy to measure at a call by call level.
2) Cost is also a factor of how many avg calls a subscriber makes as this determines the cost payable by the operator to the partner. Now this could be one of the variables in this problem. When this variable reaches an optimum value profitablity is ensured or if it falls below a certain value the customer becomes non-profitable.
There may be other costs associated but these two determine the Cost and assuming we know the Price we are charging the customer you can then determine Profit and therefore the profitability.
So for this equation to work you need to know the following:
a) The interoperator Tariffs of your operator with other operators. This data comes from the AA14 agreement documents of your operator.
b) The price of roaming calls charged by your operator to the subscriber.
Then putting a variable number of calls across the board you will be able to measure profitability.
1) One of the most important factors any such analysis would miss is the amount of non-revenue generating traffic that is required to be operated by your operator to be able to provision roaming services across visiting networks when your subscriber goes there. This can be measured by the amount of min/max signalling (SS7 signalling) required to provision and sign on to visiting networks in the operators scheme and then measuring the cost of that signalling for each time. Then somehow another variable arrives which is "Per how many revenue generating calls does a subscriber need such provisioning signalling" And that also like the avg number of calls becomes a parameter or a variable in determining profitability.
2) If this is for a national roaming network special regulated tariffs ( IOTs) have to be taken into consideration which could be more intra circle and so information gathering may become complex for these.
I think while your objectives are simple the questions should be
a) What to cross/up sell and also how much as how much also is a factor of profitability especially in roaming.
b) In case of offnet calls non-profitable subscribers are mostly the ones doing fraud or the ones that call a special number and route calls from there? Thisis also a factor of signalling and non revenue generating traffic that I mentioned in point 1 ( other factors).
c) The biggest issue normally ignored by operators in my opinion is on VAS. While VAS is cool to think about sometime the non-revenue generating traffic is so much that the potential value in the service is already lost. For example:- content downloads etc.
Hope this helps.