How the heck do you find wireless industry standard pricing? Well, you don’t – it’s close to impossible unless you know someone directly in the business.
Unless you have the help of a WEM provider, searching for this data can be difficult to get data on market trends as well.
The CTIA does have some great stats available (in fact some we’ve even quoted in previous posts).
So why isn’t standardized pricing published or listed anywhere? Many will tell you that each deal is different with it’s own unique circumstance. Because each wireless agreement carries many thousands of variables, it is rather difficult to properly claim a “standardized” rate structure or pricing plan.
While there is a great deal of truth in this argument, there still is a handy little metric to determine a standard price per wireless user.
Average Revenue Per User
ARPU (Average Revenue Per User): a measurement by the carriers to understand the value of their subscriber base. It’s widely used as a metric to compare to other carriers.
It is the measurement of the average dollars spent per month by each subscriber across their subscriber base which is calculated by taking the total revenue (this number includes taxes, fees, assessments, etc and is the total amount the user pays, not just the access fees as are so often quoted to customers by carrier reps) and dividing it by the number of total users.
For example, if carrier X has 100,000 subscribers and the revenue for these subscribers is $5,000,000, then the ARPU is $50.
How to use ARPU
Carriers like users with higher ARPUs (from data plans or feature charges and sometimes from overage charges, but usually not in the case of Bill Police customers) and you can use that as a bargaining tool.
You can use ARPU as a gauge to understand how your company stacks up to the rest of the industry in average subscriber spend.
Here are some recent data points on current carrier ARPU:
- TMobile ARPU is: $42.66 per subscriber
- Sprint ARPU is $42.57 per subscriber
- AT&T ARPU is $50.26 per subscriber
- Verizon ARPU is $43.52 per subscriber
Some Interesting Resources on ARPU
Here is an interesting article on cost per minute. It is from 2009 so a bit dated, but it does give some interesting insights into Cost Per Minute.
Here’s an important excerpt: “If you’re like most cellphone users, you probably think you’re paying less than 10 cents per minute for calls. Think again. When you do the math, you find the average cellphone customer actually pays more than $3 per minute, according to a report being issued this week by the Utility Consumers’ Action Network, a San Diego consumer advocacy group…”
Bottom line: Most telecom customers are buying more product than they use, and that’s pure gravy for service providers.
Keep defending your rights! We can help you sort through the mire to find out what makes sense for your organization, but being informed yourself is a good start.
