Why high Arpu is bad news for you

The communications industry seems to be the worst offender for impenetrable jargon, even by the low standards of the rest of the IT world. Abbreviations like HSDPA, UMTS, Edge and VoIP abound. But there is the worthy excuse that these serve as shorthand for complex technical concepts that would otherwise make discussions difficult. However, things have gone too far when obscure marketing terms are bandied around as if we are all supposed to be familiar with them.

Over the last year or so, I've lost count of the number of press releases from handset and wireless device makers that breathlessly promised that new products will deliver "fantastic growth in Arpu!" or other similar phrases.

If, like me, you thought Arpu is the name of the guy who runs the mini-market in The Simpsons, you might be surprised to learn that it stands for "average revenue per user". In other words, this is the amount of money a carrier can expect to earn from each subscriber connected to its network.

On the face of it, this seems a puzzling way of selling handsets. When a manufacturer claims that its device delivers higher Arpu than rival products, it is basically boasting that its new phone costs you more to run than rival models. This is like a car manufacturer advertising its latest model with the slogan "burns more petrol per mile than any other car on the road!"

Everything becomes clear once you look at the way handsets are sold. If you want to use mobile services, you have to sign a contract with a carrier, and most customers - whether businesses or individual consumers - simply acquire their handsets from the same source. The upshot is that the handset developers market their new models to the network operators as much as to you and I.

The conflict of interest here is obvious. Business customers want devices that will give speedy access to corporate data, but also want to secure the handset and stop staff from viewing inappropriate content. The network operators, on the other hand, want to drive profits by encouraging users to access premium-rate content as often as possible and to make heavy use of services such as MMS to send photos to their friends.

This is one reason for the rapid take-up of BlackBerry devices among UK companies, and why smartphones are almost entirely bought by consumers. While the BlackBerry is little more than an email client that doubles as a phone, most smartphone handsets double as digital cameras and MP3 music players, and some newer models even play video content that can be streamed over the network, no doubt at great expense.

The lesson for IT managers selecting wireless clients for mobile staff is this: take a good look at how the device maker is pitching its particular product to the network operators. Don't just listen to what the operator or reseller tells you about the handset capabilities - unless you have a particular desire to help boost its mobile service profits, that is.