Telecommunications Revenue Management And Pricing Analysis

Revenue management is the science of maximizing profits through pricing accordingto market demand forecasting and the mathematical optimization of pricing and inventory,The key elements of revenue management is how to sell, when to sell and to whom youwant to sell.The success of airline revenue management has motivated some researcher to payattention to telecommunication industry. Many researchers believed that airline revenuemanagement strategies can be used to generate additional revenue from spare capacity intelecom networks, based on several analogies between the industries such as, for instance,perishable inventory and negligible marginal cost of usage.However, no one has yet described a widely recognized model about how to apply itin telecommunication industry. We have tried to identify some possible applications intelecommunication industry and proposed some methods, models in order to pave the wayfor further research.We have classified the research of revenue management of telecom industry intothree layers in order to simplify it. The first is the application of revenue management inthe business layer, the second is the application of revenue management based on thecommodity-link, the third is revenue management in the network stream layer, whichconcerns about the network package flows. Mostly, we focus our researches on itsapplications in business layer and commodity-link layer.The research of revenue management was focused on three aspects: competitivepricing of telecom products, price discrimination between the network, pricing of the linkand allocation of spare capacities of networks. Pricing is the key element of revenuemanagement and will gain substantial attention.Finally, we concluded with a detailed analysis of China's telecommunication industry,and discussed the prospect of the application of revenue management intelecommunication industry.