Purpose – The mobile communication industry in China is vulnerable to competition, industry regulation, macroeconomy and so on, which leads to service income's volatility and non‐stationarity. Traditional income prediction models fail to take account of these factors, thus resulting in a low precision. The purpose of this paper is to to set up a new mobile communication service income prediction model based on grey system theory to overcome the inconformity between traditional models and qualitative analysis. Design/methodology/approach – At first, mobile telecommunication service income is divided into number of users (NU) and average revenue per user (ARPU) prediction, respectively. Then, grey buffer operators are introduced to preprocess the time series according to their features and tendencies to eliminate the effect of shock disturbance. As a result, two grey models based on GM (1, 1) are constructed to forecast NU and ARPU, and thus the service income is obtained. At last, a case on Zhujiang mobile communication company is studied. The result proves that the proposed method is not only more accurate, but also could discover the turning point of income. Findings – The results are convincing: it is more effective and accurate to employ grey buffer operator theory to predict the mobile communication service income compared with other methods. Besides, this method is applicable to cases with less data samples and faster development. Practical implications – It's common to come across a system with less data and poor information. At this case, the grey prediction method exposed in the paper can be used to forecast the future trend which will give the predictors advice to achieve fine outcomes. Buffer operators can reduce the effect of shock disturbance and the GM (1, 1) model has the advantages of exploiting information using only a couple of data. Originality/value – Considering the fast development of China's mobile communication in recent years, only limited data can be acquired to predict the future, which will definitely reduce the prediction precision using traditional models. The paper succeeds in introducing GM (1, 1) model based on grey buffer operators into the income prediction and the outcome proves that it has higher prediction precision and extensive application.
Grey Systems: Theory and Application – Emerald Publishing
Published: Jul 29, 2014
Keywords: Grey systems modelling and prediction; Practical applications of grey models