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Easy Profitability Revenue Calculation

Telecom Provider

#Telecommunications #Broadband Communications

Practice this beginner-friendly profitability case interview question in the Telecommunications sector. Includes detailed problem prompt, clarifying questions, structured framework, and expert recommendation. Part of ProHub's 835+ consulting case library.

ProHub Comment

This is a straightforward revenue calculation case that tests the candidate's ability to systematically structure a multi-line business and perform accurate arithmetic. The case also provides an opportunity for candidates to demonstrate business acumen by contextualizing the findings within industry dynamics (e.g., streaming competition, declining landline usage, economies of scale challenges).

Estimated Time 15 minutes
Difficulty Easy
Source PeterK
24 / 100
Cable Two is a broadband communications provider. It offers cable television, internet, and landline phone services across 24 U.S. states. They have hired you to improve their profitability. As part of your workstream, you need to calculate the client’s annual revenue.

Clarifying Information

  1. Exhibit 1. Cable Two’s Sales Structure
  2. We can ignore any additional revenue streams and focus on three offerings: cable television, internet, and landline phone services
Mock Interview
Interviewer

Cable Two is a broadband communications provider. It offers cable television, internet, and landline phone services across 24 U.S. states. They have hired you to improve their profitability. As part of your workstream, you need to calculate the client's annual revenue.

You

Thanks. Before analyzing, I'd like to clarify a few key questions...

Interviewer

Good question. Let me provide some background information...

You

Based on this, I suggest analyzing from these dimensions...

AI Score
Structure Analysis Communication Business Sense Quantitative
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Calculate Cable Two’s annual revenue across three service lines: cable television (150k subscribers × $120/month), internet (1M subscribers × $80/month), and landline phone services (100k subscribers × $20/month). The calculation yields $1.2B in annual revenue.

Key Insights:

  1. Revenue calculation follows a simple three-step structure: (subscribers × monthly fee × 12 months) for each line, then sum across all lines
  2. Advanced insights include recognizing why cable TV subscriber base is small (Netflix competition at lower prices), why landline usage is declining (5G and internet penetration), and how small customer bases limit economies of scale
  3. Candidates should structure their approach clearly, ask clarifying questions about missing data, perform accurate calculations, and contextualize findings with industry insights for differentiation

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