Telecom Italia has taken to examining the margins on its various service offerings in order to help it compete better in a high-pressure market.
"[We had to] change our way of seeing things," Daniele Gulinatti, VP of fraud management and revenue assurance at the Italian incumbent told attendees at WeDo Technologies’ Worldwide User Group event in Lisbon on Thursday.
"We want to check the profitability of each offer," he said.
To make its "margin assurance" project feasible, Telecom Italia initially selected certain services for analysis.
"We don’t want a flood of data to be analysed," Gulinatti said. "We started with nine fixed offerings and six mobile."
As with other telecoms operators, there are politics at play within the company and working with the various departments was not without its challenges. "The discussions can take a lot of time," Gulinatti said.
But the company was successful in getting the project off the ground, and the initial results showed that it had two similar products with similar customers, but with very different margins; while one generated a margin of 33.6%, the other came it at -3.7%, he explained, without sharing further details of the products involved.
The crucial difference was that "one of them has a very high cost of devices," Gulinatti said. "[That is] a critical aspect in terms of profitability."
The end result: one of the products is not on offer anymore "because it was negative margin," he said.
