ARPU = Average Revenue Per User

 

What is ARPU?

ARPU is a common term used in telecom companies. The full meaning of ARPU is Average Revenue Per User. Telcos use this term to understand the health of the revenue streams of the company. Normally it is calculated on Monthly Basis, but it can also be calculated in Daily, Weekly, Bi-Weekly, Monthly, Quarterly, Half-yearly and Yearly basis.

 

How to Calculate ARPU?

ARPU = Total Revenue/Total Active Subscriber Base

Example:

Telco A has earned USD 34,587,246 in January 2017. The total subscriber base of telco A is 14,798,248. What is the ARPU of Telco A for the Month of January 2017?

Answer:

ARPU for January 2017 = USD 34,587,246 / 14,798,248 = USD 2.3373

 

Commonly Used Acronyms

ARPU/Mo = ARPU Per Month

ARPU/Qtr = ARPU Per Quarter

ARPU/Yr = ARPU Per Year

 

Usage of this Term

ARPU is most commonly used in the telco management reports in order to give the management team an idea of how worthy each customer or subscriber is to the company. It gives the team an understanding of how money on an average the company is earning from each of its customers on a given period of time.