calculating LTV
...time. For Vodafone in order to estimate the life time value analysis we firstly retrieved essential information from the financial statements (appendix 1) of the company concerning the annual revenues and the operating expenses. As a result by using publicly available data we estimated the margin per customer for Vodafone by dividing the total gross margin by the number of customers. From our examination Gross profit for year 2004 was 742, 2 millions. From the EETT(Hellenic National Telecommunications Commission), which is an independent regulatory authority with extensive powers in all fields in telecommunication regulation such as licensing, frequency assignment and numbering we found that we have 4 million subscribers(number of customers).By plugging these number we estimated that the margin per customer for Vodafone is 185.5 euros. The specific amount represents the per customer profit transaction. Following from the data that we gathered from the Hellenic national telecommunication commission we found that Vodafone is not a risky company because it holds 35% of the MKT share (appendix 2).Consequently from table 1(Gupta and Lehmann) we picked a low discount rate (i) and a high retention rate(r).After performing the calculations we found that the margin multiple is 2.66. The margin multiple give us a ballpark figure of what is the value of our cus...