Telecommunications forecasting

All telecommunications service providers perform forecasting calculations to assist them in planning their networks. Accurate forecasting helps operators to make key investment decisions relating to product development and introduction, advertising, pricing etc., well in advance of product launch, which helps to ensure that the company will make a profit on a new venture and that capital is invested wisely.

Forecasting can be conducted for many purposes, so it is important that the reason for performing the calculation is clearly defined and understood. Some common reasons for forecasting include:

Knowing the purpose of the forecast will help to answer additional questions such as the following:

When forecasting it is important to understand which factors may influence the calculation, and to what extent. A list of some common factors can be seen below:

Before forecasting is performed, the data being used must be “prepared”. If the data contains errors, then the forecast result will be equally flawed. It is therefore vital that all anomalous data be removed. Such a procedure is known as data “scrubbing”. Scrubbing data involved removing data points known as “outliers”. Outliers are data that lie outside the normal pattern. They are usually caused by anomalous and often unique events and so are unlikely to recur. Removing outliers improves data integrity and increases the accuracy of the forecast.

There are many different methods used to conduct forecasting. They can be divided into different groups based on the theories according to which they were developed:

Judgment-based methods rely on the opinions and knowledge of people who have considerable experience in the area that the forecast is being conducted. There are two main judgment based methods:

Survey methods are based on the opinions of customers and are thus reasonably accurate if performed correctly. In performing a survey, the survey’s target group needs to be identified. This can be achieved by considering why the forecast is being conducted in the first place. Once the target group has been identified, a sample must be chosen. The sample is a sub-set of the target and must be chosen so that it accurately reflects everyone in the target group. The survey must then pose a series of questions to the sample group and their answers must be recorded.

The recorded answers must then be analyzed using statistical and analytical methods. The average opinion and the variation about that mean are statistical analytical techniques that can be used. The results of the analysis should then be checked using alternative forecasting methods and the results can be published. It must be kept in mind that this method is only accurate if the sample is a balanced and accurate subset of the target group and if the sample group has accurately answered the questions.

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Wikipedia