Average Margin Per User - AMPU

DEFINITION of 'Average Margin Per User - AMPU'

A widely used metric for gauging the success of businesses in the telecommunications industry. Average margin per user (AMPU) measures the margin made by the firm from each customer, typically measured as the revenue minus the costs and divided by the number of users.

BREAKING DOWN 'Average Margin Per User - AMPU'

Although most telecommunications-industry analysts and firms use average revenue per user (ARPU) as a profitability indicator, AMPU is arguably a more reliable metric of a firm's profitability. By breaking down customer sales by margin rather than by revenue, companies that have lower sales volumes but create larger margins can be considered more efficient and arguably more profitable than their high-volume competitors.