The Mobile Subscribers Who Aren't
By Mike Masnick, Sat Dec 04 01:15:00 GMT 2004
Recounts aren't just for elections. With so much focus being place on mobile subscribers, some have discovered that uptake numbers may be significantly overestimated.
Lots of companies are basing business plans on mobile uptake, but like so many things in the industry, they may want to scale back their predictions a little bit. It's not just marketing hype that's often getting ahead of itself -- actual subscriber uptake is often being over counted. The main culprit, not surprisingly, is prepaid accounts. Down in South Africa, a more careful analysis of mobile uptake has discovered that earlier estimates were significantly over counting. In March of this year, for example, the published number was 18 million, but the revised estimate knocked it all the way back down to 14.5 million.
There are a few reasons for this massive miscount, but the main problem is figuring out how to count prepaid customers. This isn't a new issue at all, and many people know to be somewhat skeptical of prepaid subscription numbers. It's difficult to know how they're being used, or if single users are buying multiple prepaid accounts -- which seems to be exactly the case in South Africa. With startup offerings for prepaid accounts often much cheaper than topping off minutes, many people seem to keep buying starter kits every time they need new minutes. The same is true of seasonal promotions that cause people to quickly jump from provider to provider, often keeping multiple accounts "open" even if most aren't being used. Finally, a noticeable percentage of the prepaid phone business in the country is from tourists, who come in, buy a prepaid phone, but never plan to use it again after they leave the country. However, they're still counted in the overall number of "subscribers."
Depending on your position, this is both good and bad news. It's bad news for those who have business plans that rely on huge volume -- as the available market is now revealed to be smaller than believed. However, for providers, it means that the feared market saturation point is further away, and there's plenty of room to expand within many existing markets.
The real lesson out of all of this is the importance of understanding the difference between marketing statistics and actual statistics. The industry has a habit of pushing up marketing statistics for outsiders, but when those within the industry start to believe their own marketing numbers, bad decisions get made.