How Telecommunications Companies Can Benefit from Customer Profitability


Imagine you own a large, successful telecommunications company that has grown to a thousand different base stations. Then one day you receive a report saying that the top 10 percent of your profitable customers are threatening to leave.

What’s the reason? They feel that they are not getting the services that they deserve. Okay, all you need to know is the following information: Which profitable customer is using which base station? And how many stations need to be upgraded?

How do you figure that out? You need visual insight into your data, so you can prioritize the top 10 percent of profitable customers and upgrade the stations they use most so that you can regain these customers’ loyalty.

How could we prioritize data? And why is prioritizing important? We can prioritize where to invest in upgrading stations by analyzing data from each customer. With this, companies can see which customers are most profitable. This gives telecom companies the ability to concentrate on specific customers and the service levels to those customers first and foremost.

Is it possible for telecom companies to invest in better technological equipment? Yes, it is possible. Unfortunately, all telecom companies have a budget. They have thousands of base stations, but they cannot afford to upgrade them all in a single year.

Is it possible to tie customer profitability to capital investments? Yes, SAP is making strides toward this idea by providing analytics that link individual margin per user (IMPU) to capital investments.

How SAP Leonardo for Telecommunications can help

To address the challenge of customer retention, SAP has come up with the industry innovation kit SAP Leonardo for Telecommunications, Big Data margin assurance option. The kit offers the benefit of identifying margin risk areas with consolidated data and view across business, as well as viewing granular insights at the customer, product, and asset profitability level.

By using SAP Leonardo Analytics capabilities, SAP Leonardo for Telecommunications, Big Data margin assurance option, can sort large amounts of data. The kit can put all the services and data sources into a comprehensive view in real time, which allows managers to read a fast summary of the data on a customer, tariff ,and service level. The summary is made easily accessible through the SAP Cloud. Due to transparency, the kit can help locate the root-cause of profitability leakage, which translates to understanding the difference between profitability rates among customers.

How Understanding Profitability Rates Helps

Once a telecom company figures out which network area the top 10 percent of customers are connected to, it can act. For instance, if most of the customers are in one neighborhood within San Francisco area, the company would know which base station the customers are connected to. They then could see which antennae is getting the most usage.

But the primary reason customers are threatening to leave is because of poor services; for example, not having access to the network, dropping calls, or not getting the data throughput that they were expecting. With the industry innovation kit, the telecom has figured out the correct base station to target and can upgrade or repair them and retain their top 10 percent of profitable customers. This will save money on assets and keep important customers happy.

SAP Leonardo for Telecommunications, Big Data Margin Assurance Option, in Action

Yusuf Butun spoke about SAP’s co-innovation with a leading telecom provider. The telecom company had huge amounts of data. Its main challenge was to determine the profitability for any given customer. The company could gather all the information, but couldn’t make sense of it. It couldn’t break things down to a customer level. With SAP the company was able to do automated analysis and outlier detection and could rank the customers by profitability. The co-innovation allowed the customer to answer key questions, including: Which customers have the higher profitability? Which customers have lower profitability? How do I get more high profit customers? This allows the company to visualize its plans, so it can accurately execute them.

SAP Leonardo for Telecommunications, Big Data margin assurance option, can help in many ways. It can consolidate Big Data into a viewable easy-to-understand source. It can help managers decide which assets needs to be upgraded. Lastly, it can help save money and retain high margin customers.

Learn more about Big Data margin assurance option