Case Study for Commercial Delivery Specialist position

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SUMMARY

The forum discussion focuses on the savings analysis for Vodafone's voice services, specifically forecasting Average Revenue Per User (ARPU) discounts by country. To achieve a cumulative reduction of 27% by the end of year 3 and 35% by the end of year 4, specific percentage reductions are calculated: 5% for year 3 and 8% for year 4. The discussion emphasizes the importance of understanding cumulative reductions in financial forecasting and provides a clear breakdown of necessary calculations for each country involved.

PREREQUISITES
  • Understanding of ARPU (Average Revenue Per User) calculations
  • Proficiency in Excel for data analysis
  • Knowledge of cumulative percentage reductions
  • Familiarity with financial forecasting techniques
NEXT STEPS
  • Learn advanced Excel functions for financial modeling
  • Research cumulative percentage calculations in financial contexts
  • Explore case studies on ARPU optimization strategies
  • Investigate Vodafone's market strategies in voice services
USEFUL FOR

Financial analysts, commercial delivery specialists, and professionals involved in telecommunications revenue management will benefit from this discussion.

Night_Hacker
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Savings Analysis
Please proceed with the following calculations, based on the data you can find in the attached Excel sheet:
  • Forecast the ARPUs for voice services by country: Determine the ARPU discounts that are needed by country in order to deliver cumulative reduction of 27% by the end of year 3 and 35% by the end of year 4
  • Forecast the Actual savings of the customer over the life of the deal in total and by country
  • Forecast the YOY revenue of Vodafone for voice services in total and by country
Negotiated reductions (blank means reductions to be determined)

CountryConnectionsExisting ARPU in local currencyARPU in €
1​
2​
3​
4​
UK
156​
52​
€ 63.44
12%​
10%​
blank blank
Spain
420​
68​
€ 68.00
15%​
0%​
blank blank
Germany
321​
45​
€ 45.00
13%​
blank
8%​
blank
France
51​
51​
€ 51.00
10%​
5%​
blank blank
US
1245​
75​
€ 58.99
15%​
5%​
blank blank
Japan
892​
9213​
€ 85.57
30%​
0%​
5%​
blank
3085​
 
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Do you understand what "cumulative" means? If you do you should recognize this as simple arithmetic.
You want "a cumulative reduction of 27% by the end of year 3 and 35% by the end of year 4".
The first reduction is 12% and the second is 10%. That is a cumulative 12+ 10= 22%. To get a cumulative reduction of 27% the next next year, the amount for that year must be 27- 22= 5%. To get a cumulative reduction of 35% by the fourth year, the amount for that year must be 35- 27= 8%. 12+ 10+ 5= 27 and 12+ 10+ 5+ 8= 35.