Research On The Customer Equity Measurement For Telecom Enterprises Based On Real Options Analysis

With the ever increasing of the market competition and saturation in telecom businesses, managers of the telecom enterprises increasingly pay attention to customer equity management. Customer equity is defined as the summation of the discounted lifetime consumption values over all of the firm's customers; it is a kind of important strategic assets and also, a vital component of the value of the enterprise in every company. The traditional measurement of customer equity models ignores the contributions of customer equity to the development of the enterprise strategies and, as well the values of flexible management of customer equity as strategic assets. In other words, it ignores the strategic value of customer equity,While by using the tools and techniques of real options analysis, we can easily and fairly well handle the above problems, and round the difficulties off. Therefore, this article will combine the traditional measurement models with the method of real options analysis to do exploratory research on customer equity measurement of telecom enterprises.Under the briefly statement of the general situation of domestic telecom enterprises, this paper explores and analyzes the real options characteristics of the telecom enterprises′customer equity and the major influencing factors of customer equity measurement. Benefited from the present value method and real options analysis, this thesis constructs the customer equity measurement model of telecom enterprises. Based on the prerequisites and basic ideas of the proposed model, we make some hypothesizes about the customers lifetime profitability and the business strategic investment of telecom companies, and then complete measurement model of customer equity in telecom enterprises. At last, this paper considers a numerical example studying on Changsha Branch of Hunan Unicom to test and verify our proposed model, according to the historical consumption data in an area of the customer base. And then this paper puts forward some recommendations about customer equity management.Customer equity measurement of telecom companies combined with real options theory has not yet been thoroughly investigated in China. The study in this thesis is only carried out some preliminary exploration,and there is a broad prospect exploiting the real options theory in the field of customer equity measurement and management in the future.