Expanding Growth Markets with Subscriber Segmentation

Abstract

This paper presents an innovative solution to reduce the total cost of ownership (TCO) for mobile users in growth markets. This specifically addresses countries with a large variety of average revenue per user (ARPU). Instead of a traditional, homogeneous subscriber base, the new concept enables the operator to offer service quality depending on a subscription class chosen by the subscriber. This way, a high-income, high-ARPU segment can expect top service quality ("no call blocking or dropping"), while low-income, low-ARPU subscribers, who previously were not able to afford any kind of mobile services, will experience a "best effort" type of service, with high service quality most of the time but increased call blocking rates and vulnerability to pre-emption during busy hours. The higher ARPU from high-class subscribers and the generation of additional low-ARPU subscribers are expected to generate ca. 50% higher revenue for the operator. Capacity upgrades show an immediate return on investment (ROI). Due to its still dominant position in the market share of mobile services, GSM voice calls are the main focus of this work