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Important KPIs for the Telecom Industry

No matter the industry, companies are always looking for new ways to improve operations and profitability. The organizations that are best at utilizing their resources are more likely to succeed in the long run. Data is undeniably one of the most effective methods for achieving this goal. Numbers don’t lie. So, it’s important to listen to what they’re saying. The telecom industry is full of gatherable data. Here are some of the most important KPIs for telecom companies.

Average Revenue per User

This is a measure of how much money a company is making versus the number of people using the service. Average revenue per user is an extremely useful KPI for telecom companies because they have such large user bases. The amount of money coming in per user is going to be highly indicative of the overall health of the business. Additionally, there are a few ways to think about average revenue per user. Not everyone who uses a telecom service will be paying a bill. Oftentimes entire households or families will share one plan. It’s important to keep track of revenue per paying customer as well as revenue per user. Large discrepancies between these might point to potential areas for improvement.

Churn

It’s crucial for telecom companies to keep track of churn in their customer bases. Some would argue that churn is essential to telecom network analytics. Churn is essentially a measure of customer turnover. A high churn rate is often indicative of something inherently wrong with a subscription service. In an ideal world, most customers will renew subscriptions as opposed to canceling them and moving to another competitor. Telecom companies need to be cognizant of their churn numbers. It’s often expensive to acquire new users; so, retention is key.

Customer Acquisition Cost

As mentioned above, getting new customers can be a huge financial burden on businesses. This is part of why it’s a good idea to keep track of how much it actually costs to do this. There are many elements that go into calculating customer acquisition costs. Therefore, it can sometimes be a convoluted KPI. Your sales teams of course need to be factored into this cost, as do marketing costs. But how can you actually quantify the effectiveness of marketing? In most cases, it’s extremely difficult. You also need to consider the costs of actually getting people started with your service. It’s a good idea to calculate customer acquisition costs with a few different levels of included variables. This will help create the most accurate picture possible.

Quality Scores

Telecom KPIs shouldn’t just revolve around business metrics. It’s also important to take the performance of the product into account. What are some of the top things people prioritize when it comes to their telecom service? Reliability is certainly one of the biggest considerations. Nobody wants to pay for a service that doesn’t work. If this is a recurring issue, people will start to notice. Poor reliability is one of the things that generates churn. And as already noted, high costs associated with getting new subscribers make churn a worrisome. It also makes sense to gauge differences in reliability between different package levels.

Market Share

With large, established markets such as the telecom industry, it’s key for businesses to track their share of the field. Market share give insights into potential areas of improvement—as well as places where an organization is finding success. It’s smart to evaluate market share from a few different perspectives. Consider this KPI from a lens of revenue, subscriber base, or just total amount of services used by customers. All of these numbers will help elucidate the overall effectiveness of one telecom provider versus others.

It doesn’t make sense for a business in today’s world to avoid data. In all cases, looking at additional information will allow for better decisions. Telecom companies can especially benefit from delving into certain KPIs.