Telecom Now is a Multi-Product Business

Vodafone gets 14.5 percent of its £43 billion service revenue from mobile data, despite the fact that it represents the majority of traffic carried.

That points out one important new challenge for service providers operating multi-product businesses, where each service might have a different profit margin and revenue contribution.

You might even say that, at the moment, the highest-margin products are narrowband, representing a small percentage of total traffic.

Some products might represent high volume but low profit, while other services might represent low volume but high profit, with most services likely someplace in between those extremes.

One of the truisms about virtually every business is that 80 percent of the profits will tend to come from about 20 percent of the activities people at those businesses conduct. That “Pareto” distribution can apply for a business as a whole, as well as for each constituent product a company sells.

So it now is quite necessary to understand, in detail, what profit margin every single product delivers, as well as what the cost of each discrete service might be.