KPI’s of Telecom

Industry
Business Intelligence Assignment
Submitted To
DR.G.Kannabiran
Mrs.P.Sridevi

Submitted By
Jayachandran.M- 215109071
Sabri bin Kasim-215109083
Archana.V-215109051

Submitted On
15th April 2010

DEPARTMENT OF MANAGEMENT STUDIES

NATIONAL INSTITUTE OF TECHNOLOGY,TRICHY

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Contents
1.0 Introduction.....................................................................................................................................3
1.1 Identifying KPI’S of an Organization...................................................................................................3
1.2 Categorization Of Indicators..................................................................................................................4
2.0 Key Performance Indicators For Telecom Industry..............................................................................4
2.1 Call center..........................................................................................................................................5
2.2 Systems and Network Performance Analysis / Capacity Planning....................................................5
2.3 Revenue / Financial Analysis............................................................................................................6
2.4 Customer Satisfaction........................................................................................................................6
2.5 Quality / Usage (Airtime): Analysis of the volume of successful calls..............................................6
2.6 Coverage............................................................................................................................................7
2.7 Marketing..........................................................................................................................................7
2.8 Faults and complains (Trouble tickets analysis)................................................................................7
2.9 Fraud Analysis...................................................................................................................................7
2.10 Compliance / Service Analysis........................................................................................................8
2.11Customer Analysis............................................................................................................................8
3.0 A Case Analysis of KPI’s in Different Mobile Service Provider..........................................................8
3.1 Our Analysis of Bharti Airtel KPI’s..................................................................................................9
3.2 KPI’s of Vodafone...........................................................................................................................10
4.0 Suggestion of New KPI’s / categories................................................................................................11
4.1 New category :.................................................................................................................................11
4. 2 New KPI’s under different categories.............................................................................................12
5.0 Conclusion...........................................................................................................................................13
6.0 References...........................................................................................................................................13

KEY PERFORMANCE INDICATOR

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1.0 Introduction

A performance indicator or key performance indicator (KPI) is a measure of performance. Such

measures are commonly used to help an organization define and evaluate how successful it is,
typically in terms of making progress towards its long-term organizational goals. KPIs can be
specified by answering the question, "What is really important to different stakeholders?". KPIs
may be monitored using Business Intelligence techniques to assess the present state of the
business and to assist in prescribing a course of action. The act of monitoring KPIs in real-time is
known as business activity monitoring (BAM). KPIs are frequently used to "value" difficult to
measure activities such as the benefits of leadership development, engagement, service, and
satisfaction. KPIs are typically tied to an organization's strategy using concepts or techniques
such as the Balanced Scorecard. The KPIs differ depending on the nature of the organization and
the organization's strategy. They help to evaluate the progress of an organization towards its
vision and long-term goals, especially toward difficult to quantify knowledge-based goals.

1.1 Identifying KPI’S of an Organization

Performance indicators differ from business drivers & aims (or goals). A school might consider
the failure rate of its students as a Key Performance Indicator which might help the school
understand its position in the educational community, whereas a business might consider the
percentage of income from return customers as a potential KPI.

But it is necessary for an organization to at least identify its KPIs. The key environments for
identifying KPIs are:

■Having a pre-defined business process (BP).

■Requirements for the business processes.

■Having a quantitative/qualitative measurement of the results and comparison with set goals.

■Investigating variances and tweaking processes or resources to achieve short-term goals.

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A KPI can follow the SMART criteria. This means the measure has a Specific purpose for the
business, it is Measurable to really get a value of the KPI, the defined norms have to be
Achievable, the KPI has to be Relevant to measure (and thereby to manage) and it must be Time
phased, which means the value or outcomes are shown for a predefined and relevant period.

1.2 Categorization Of Indicators

Key Performance Indicators define a set of values used to measure against. These raw sets of
values fed to systems to summarize information against are called indicators. Indicators
identifiable as possible candidates for KPIs can be summarized into the following sub-categories:

■Quantitative indicators which can be presented as a number.

■Practical indicators that interface with existing company processes.

■Directional indicators specifying whether an organization is getting better or not.

■Actionable indicators are sufficiently in an organization's control to effect change.

■Financial indicators used in performance measurement and when looking at an operating index

2.0 Key Performance Indicators For Telecom Industry

The main key performance indicator of a telecom field can be categorize as the
following. call centre, systems and network performance analysis/capacity planning,
revenue/financial analysis, customer satisfaction, Quality / Usage (Airtime): Analysis of the
volume of successful calls, Coverage, Marketing, Faults and complains (Trouble tickets
analysis), Fraud Analysis Compliance / Service Analysis, Customer Analysis. Different
components in each sector is explained below.

2.1 Call center

-Wait times

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- Average speed of answer
- Call volume
- Number of complaints received
- Revenue per call
- Average quality of calls
- Number of call transfers
- Average call length
- Number of one call resolutions
- Abandon rates
- Customer satisfaction
- Number of calls answered within ten seconds
- Agent Efficiency

2.2 Systems and Network Performance Analysis / Capacity Planning

- Availability
- Grade of service
- Service life of equipment
- Bit error ratio (data, bits & elements transfer)
- Bit rate (data, bits and elements transfer)
- Downtime / Time out of service
- Call completion ratio
- Cost of support systems
- Cost of operational systems
- Average call length
- Analysis of ASR routes
- Network traffic, congestion
- Idle time on network
- Dropped calls

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2.3 Revenue / Financial Analysis

- Average revenue per user (ARPU)

- Prepaid ARPU
- ARPU from contracts
- Revenue per voice-minute
- % of non-voice revenue
- Average revenue realization (ARR)
- Minutes of usage (MoU) per subscriber
- Average revenue per employee (ARPE)
- Average revenue per subscriber (ARPS)
- Periodical Revenue Analysis
- Analysis of company overheads
- Profit and loss Analysis
- Recovery Analysis

2.4 Customer Satisfaction

- Average score from external surveys

- Average score from internal surveys
- Average score from call monitoring
- Total number of complaints
- Total number of unresolved issues
- Number of responses generated

2.5 Quality / Usage (Airtime): Analysis of the volume of successful calls

- Mean Opinion Score

- Service
- Duration of calls
- Billed amount on each call

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2.6 Coverage

- % of land covered with services

- % of population covered with services
- Average land unavailable to services
- Average population unavailable to services
- Access to customer service

2.7 Marketing

- Effect of promo campaign on subscriptions

- Trend analysis
- Segment analysis
- Call behavior analysis

2.8 Faults and complains (Trouble tickets analysis)

- % of open and level of escalation priority required

- % closed
- mean time to resolved
- Work in progress
- Customer service level statistics

2.9 Fraud Analysis

- Normal traffic
- Identify deviations from normal traffic patterns
- Normal usage per customer per area of country
- Identify phone numbers for customers with high deviation

2.10 Compliance / Service Analysis

- Service connection
- Timeframes repairs and installations

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- Reliability
- New service connections
- Activations, de-activations, re-activations
- Misc services
- Waiting time
- Waiting period before grant of service
- % order error rates and reasons

2.11Customer Analysis

- Customer segmentation
- Analysis of subscriptions
- Top N customers
- Churn

3.0 A Case Analysis of KPI’s in Different Mobile Service Provider

Telecommunication service industry around the world is facing significant challenges from competition,
technological revamps at very short frequencies and never-ending customer demands. In full-grown
markets, the preferred path to growth is that of acquisition of competitors or alliance with newer partners.
On the other hand, promising markets with explosive demand provide vast opportunities for the players.

Today, telecommunication industry is no longer technology centric, but it revolves more around customer
relationship. Customer satisfaction and marketing intelligence with innovative promotional schemes and
advanced technology are the drivers of business. Also, cutthroat competition and mammoth investments
in the telecom industry churn away profit margins and make intelligent decision making critical.

In this case we had done analyzing of KPI’s of various mobile operator in India. Following is our analysis
of airtel and Vodafone network

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3.1 Our Analysis of Bharti Airtel KPI’s

Through our friends contact we get a contact in Bharti Airtel , Trichy office and we made
analysis of their KPI’s specifically how their KPI’s change their according to their regional/local
environment. From our analysis, we have listed out their KPI’s below on different categories. Airtel is
following a slightly different KPI’s for individual and corporate customers.

Key KPI’s of Airtel (Common to both Corporate and Individual)

S.No Key Performance Indicators Categories
1 Voice Minutes on Network Systems and Network
Performance Analysis
2 RPM(Revenue per Minute) Revenue/Financial
3 ARPU(Average revenue Per User) Revenue/Financial
4 Prepaid ARPU Revenue/Financial
5 Minutes of usage (MoU) per subscriber Revenue/Financial

Key KPI’s of Airtel (Corporate)

S.No Key Performance Indicators Categories
1 International Roaming Minutes Usage
2 Globalization: Number of Countries Operating Entity Coverage and spread

Key KPI’s of Airtel(Individual)

S.No Key Performance Indicators Categories
1 Company Owned Sales Outlet Marketing
2 Subscriber Acquisition Cost (SAC ) Marketing
3 Average Revenue Per Employee Revenue/Financial
4 Average Call Duration Usage

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3.2 KPI’s of Vodafone

Compared to Airtel, Vodafone is also following a similar pattern of KPI’s with some changes in their
operational and financial KPI’s. Some of the key strategic KPI’s in Vodafone are

Financial KPI of Vodafone(in Pounds)

S.No Key Performance Indicators 2008 2007 2006
1 Revenue and related organic growth £35,478m £31,104m £29,350m
4.2% 4.3% 7.5%
2 Adjusted operating profit and related £10,075m £9,531m £9,399m
organic growth 5.7% 4.2% 11.8%
3 Capitalised fixed asset additions £5,075m £4,208m £4,005m

Operational KPI of Vodafone

S.No Key Performance Indicators 2008 2007 2006
1 Mobile customer net additions 40.5m 23.9m 26.6m
2 3G registered devices and related 27.0m 15.9m 7.9m
organic growth 67.5% 105.6% 461.1%
3 Customer Delight Index 73.1 70.6 69.9

Strategic KPI of Vodafone

S.No Key Performance Indicators 2008 2007 2006
1 Voice usage (millions of minutes) 182,613 156,546 135,933
2 Operating expenses as a percentage of
23.4% 23.8% 22.8%
service revenue
3 Adjusted operating profit and related £3,729m £3,244m £2,763m
organic growth 20.9% 27.4% 16.0%

4.0 Suggestion of New KPI’s / categories

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 Based on our analysis , we would like to suggest the following KPIs that will decide the key
performance of the telecom industry in near future.We also have a suggestion to add new
categories .

4.1 New category :

 Green and Sustainability

This specifically a new dimension in the KPI. As we are facing a global threat of Global
warming, it is a corporate responsibility to have control over CO2 emissions and energy
conservation. According to the report, using a cellphone for a year on average uses 4,221
MJ of energy (equivalent to 32 gallons of gasoline) and emits 112 kg of CO2 (equivalent
to 12.8 gallons of gasoline). This shows we need to have a control check on the usage
rate of cellphone effectively. The factors like CO2 emisson and energy conservation
plays a major role . The Ministry of New and Renewable Energy of the Indian
government is likely to come out with a mandate that would require telecom operators to
transform their cellphone towers from being powered by diesel generators to solar panels.
It is also mandatory to have some factors to know of solar panel towels.

 Spectrum Efficiency
Spectral efficiency, spectrum efficiency or bandwidth efficiency refers to the
information rate that can be transmitted over a given bandwidth in a specific
communication system. It is a measure of how efficiently a limited frequency spectrum is
utilized by the physical layer protocol, and sometimes by the media access control .With
the number of players in the industry is growing, it is pivotal for any company to make a
note of their bandwidth and their spectrum efficiency.The factors like Spectrum per
Operator , Busy Hour mErlangs carried per sq km per M Hz plays a major role in
spectrum efficiency.

4. 2 New KPI’s under different categories

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 KPI Category Description
Subscriber per Employee Subscribers (Subs) This will give number of
subscribers to employees.

Average Revenue Per Cell Site Revenue Revenue generated from each
Cell site.
CapitalExpenditure per Revenue Initial Expenditure incurred in
subscriber getting a subscriber.
Energy Consumption Green and Sustainability Energy consumed for every
call

Co2 Emission/ Sub Green and sustainability CO2 emissions per subscriber
per year.
Spectrum per Operator Spectrum efficiency Spectrum applicable per
operator
Busy Hour mErlangs carried Spectrum efficiency Peak hour traffic
per sq km per M Hz

5.0 Conclusion

Telecom industry specifically in India has a healthy competition . From porter’s strategy , a company
can survive through its competitiveness and core competencies. These KPI’s are really the barometer for
measuring the benchmarks set by the companies not just to excel but also to survive in the long run.
Clearly KPI’s sets the path of key points in for operational, marketing, financial , customer satisfation
etc . The new KPI’s and their categories which we have suggested are really going to be the key factor for
every company in the future. As we see Himalayas melting on one hand, Antartica rising on other hand,
the company had started focussing on renewable energy , green energy , CO2 emissions , it is imperative
for every company to take these KPI’s into their consideration for their future .

More oppurtunities are also expanding as we expand our technology.As we see 3G technology ,
is setting the trend for all the companies in India , Spectrum efficiency is going to decide the fate of the
company. Faster the speed, faster the growth. Future 4G technologies, Wi Max also have an impact on
KPI’s , but we have not considered those things into our analysis.

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6.0 References

6.1 Contacts

1) Mr.Sarun, Asst. marketing executive, AIRTEL,Trichy Division.

2) Mr.Abiraman, Sales executive, Vodafone, Calicut Division.

6.2 Websites

1) www.KPIlibrary.com

2) http://www.telecomasia.net

3)www.smartkpis.com

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