Sales forecasting in Telecommunications industry.

What is Sales forecasting?

A sales forecast is a projection or an estimation of what your
performance as a sales organization will be at the end of a
measurement period (most often either monthly or quarterly)
Role of Sales forecasting in Telecommunications:
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.

Why is forecasting used?

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:

Planning and Budgeting Using forecast data can help network planners decide how
much equipment to purchase and where to place it to ensure optimum management of traffic
loads.

Evaluation Forecasting can help management decide if decisions that have been
made will be to the advantage or detriment of the company.

Verification As new forecast data becomes available it is necessary to check whether

new forecasts confirm the outcomes predicted by the old forecasts.

3.5. MONITORING THE SALES FORECAST

As the sales realize for the operating period these should be monitored at a regular periodicity. The
unfolding of market reality often creates the need to adjust the sales forecast Business prudence desires
that in the case of annual sales forecast, these be thoroughly reviewed at least on a quarterly basis and if
need be corrected too. A similar review on an annual basis in/the case of long-term forecast is felt
necessary. In the process of carrying out corrections in the sales forecast emphasis should be laid on
diagnosing the causes warranting such corrections so that the accuracy level of sales forecasts be improved
In any case a strong justification must be made for modifying the sales forecast so that suitable adjustment
in the marketing and sales strategy be also carried out.
A sales forecast predicts the value of sales over a period of time. It becomes the basis of marketing mix

and sales planning.

A short-term sales forecast (say for a period of one year) when linked to the sales budget
Helps in the preparation of an overall budget for the firm as a whole. The short-term sales forecast in effect
also provides the essential financial dimension to sales in terms of expected sales revenue and expenses
required. Also, it helps in assessing the cash inflow and outflow needs and their sources.
A long-term sale forecast (say for a period of 5 years or so) on the other hand, focuses on capital
budgeting needs and process of the firm. It provides for changing the marketing strategy of the firm, if
needed, and includes reference to emerging product market needs, new market segments to be catered,
review of distribution network and promotional programmes, organization of sales force, and marketing
set up. The long-term sales forecast, triggers the task of aligning the production, procurement, financial
and other functional needs of the firm with the finalised sales forecast.