Network Planning 101: ARPU, MoU…
Here are some definitions from Telefonica Brazil:
- ARPU: Average Revenue Per User. ARPU = Net Revenue from Service / Average number of clients
- MOU: Minutes of Use measure in minutes, of the clients average traffic. MOU = (total originated minutes + minutes received) / average number of clients in the period)
The formula to calculate the average number of clients is not clearly explained and leaves a lot of room for interpretation. Then I found these definitions from Eurostat, the statistical office of the European Union:
- Average revenue per user (ARPU) – total retail mobile revenues divided by number of active SIM cards
Average revenue per minute (ARPM) – total voice related retail revenues divided by total voice minutes
Here the average number of clients becomes the number of “active SIM cards” which is a bit more precised, however the way it should be measured is not mentionned anywhere:
- is it only fully active SIMs in the HLR (incoming and outgoing services)?
- does it include also one-way barred SIMs, does it include zero-balance?
- what is the number of days until a SIM becomes inactive? 30, 60, 180?
Finally I found this interesting document from Ernst & Young which gives some interesting pros and cons on financial KPIs for Telcos: ey_metrics_transformation_in_telecommunications_ef0117