The telecom industry is facing a crossroads with declining average revenue per user (ARPU) and increasing data consumption per SIM. To remain competitive, operators must offer higher quality of service and larger data packs bundled with added features to increase the price elasticity of demand. They must then leverage technological advances to reduce their cost-per-GB-to-serve data, ultimately resulting in sustained or higher profits. The pressure on ARPU is due to competition, OTT substitution, and commoditization of traditional voice and SMS services. It is imperative for operators to understand the underlying drivers of margins per subscriber and leverage them to dynamically price mobile tariff plans to stave off the threat of ARPU or margin decline.
