Revenue Generating Unit (RGU)

What Is a Revenue Generating Unit (RGU)?

A revenue generating unit (RGU) is an individual service subscriber who creates recurring revenue for a company. This is utilized as a performance measure for management, analysts, and investors.

RGUs are tracked by telecom companies, cable companies, and different organizations that have a base of subscribers for a service. RGU growth can happen organically or through acquisitions.

Understanding Revenue Generating Units (RGUs)

Revenue generating units (RGUs) are subscribers — either individuals or organizations, however generally normally applied to individuals — who pay for monthly services like mobile telephones, internet, web-based features, or cable TV.

RGUs as a term has become interchangeable with "customer connections," "customers" or just "subscribers," where users are the "units" in question. Anything a company chooses to name them, it orders this data, segments, and investigates. RGU figures are frequently used to work out average revenue per unit/user (ARPU), one more key measurement for the telecom and cable industries.

A company is keen on net increases to RGUs. It will examine where RGUs were added geologically and in which product lines. The company will endeavor to attribute these gains in subscribers to a specific marketing campaign or change in the competitive scene. Additionally, assuming that there were RGU losses, it would try to determine the reasons and take moves toward address the attrition.

Finding RGU Data

Freedom Global Group is a genuine illustration of a company that breaks down its RGU data.

Its quarterly 10-Q and annual 10-K filings contain RGU tables that segment cable service type (voice, video, data), mobile service type (prepaid, postpaid), and by countries where the company works. Net augmentations or losses of RGUs are then examined in the company's MD&A, or management discussion and analysis.

Average Revenue Per Unit (ARPU)

The average revenue per unit is equivalent to total revenue separated by average units (or users) during a period. The period-end date isn't the measure date for the denominator in light of the fact that the number of units can change intra-period. All things being equal, the beginning of the period and the finish of the period numbers are regularly averaged.

Nonetheless, the number of units or users may not stay consistent all through the standard time span. It can shift to some degree from one day to another, as new users show up or old users cease to take advantage of a service. Hence, the number of units for a given period must be estimated to give the most reliable ARPU figure feasible for that period.

To accurately work out ARPU, one must initially characterize a standard time span. Most telephone and communications transporters, for instance, work out ARPU on a month-to-month basis. The total revenue produced during the standard time span ought to then be separated by the number of units or users.

Features

• The average revenue per unit measures the mean revenue created per RGU.
• A revenue generating unit (RGU) alludes to a service subscriber or client that makes continuous types of revenue for a firm.
• Telecom, media, and internet services companies are probably going to keep track of RGU data and to try to increase RGU flows.