ABI Reports on ARPU Strategies of U.S. Mobile Service Providers

Mobile service providers all over the world are devising new ways to increase their average revenue per user (ARPU). In order to retain and expand customer bases, providers often find that offering value-added services —  such as friendly data policies, and improved messaging — can translate to success.

 

Currently, the four major U.S. mobile service providers — Verizon, AT&T, Sprint and T-Mobile — are adopting their own methods for achieving ARPU goals and retaining customers.

 

ABI Research (News - Alert) recently conducted a study to find examine the critical factors augmenting or affecting profits of mobile service operators.

 

This research found that each operator is following its own methods of achieving  ARPU goals. These differing strategies, ABI predicted, will mostly be successful in the short term. For example, Verizon (News - Alert) is focusing on broadening its portfolio of services and its network coverage. Verizon, ABI said, offers relatively high prices on per-minute call rates, offsetting ARPU reductions it might see otherwise due to no marked increase in its voice usage volume.

 

By comparison, T-Mobile’s introduction of the BlackBerry (News - Alert) did not significantly increase that carrier’s ARPU because of least-cost rates.

 

ABI’s research sought to explore and explain the defying factors that affect ARPU in an aggressive market situation. The research firm studied critical mobile market elements such as the quality of service, size of operation, company profile, offered operator appraisal ratings, access to smartphones, pricing policies, technical capabilities, and value-added services like GPS. As mentioned already, ARPU was also a major focus — examining services like voice calling, messaging, mobile broadband Internet access and other related applications.

 

ABI Research zeroed on five dynamic issues in its study: occupation distribution, customer mobility, smartphone penetration, pricing, and device feature adoption. These five issues were considered essential elements related to providing mobile services. Most mobile ARPU accrues from the high-end users, and therefore providers must offer a flexible range of products on their own or through joint business ventures. Catering to the demands of business users, ABI said, is especially important.

 

Edited by Mae Kowalke