re: EMC on ARPU around the world
Whilst worldwide ARPU continues to fall ($35 at Q3 2001 - EMC World Cellular Database), it is doing so at a slower rate.
Vodafone UK was not unique in cutting out subscribers, as mentioned above its subsidiaries followed suit, although operators in which it had smaller or minority holdings (Verizon Wireless) reported one-time adjustments in Q1 2001, with subscriber growth showing a 'blip', and then continuing to grow.
2001 - The Year That Operators Had To Confront Reality And Revenues
EMC's Subscriber Analysis Team
December 2001
The following is a short extract from the EMC World Cellular Review to be published this month
2001 was the year that operators got smart with ARPU. With the nearing of saturation of many markets and debts building up analysts and the financial community turned its attention to how much money operators were making from each subscriber. Historically operators have judged themselves on subscriber growth and market share, whilst these remain key indicators, ARPU now ranks equally importantly.
As ARPU fell operators looked at ways to stabilise and increase it. One method used in 2001 was to alter the parameters by which ARPU is measured. Rather than rising revenue, the way in which ARPU could be increased was to re-classify the size and definition of subscriber bases. This created the equally desirable effect of raising ARPU.
Vodafone started the process. Its Q1 2001 results were accompanied by the news that the subscriber base would be subject to a new classification. This was uniformly adopted by all Vodafone subsidiaries in which it had a controlling stake, and for some in which it had a minority. Customers were classified as either registered or active, with active subscribers defined as those who had made or received a chargeable call in the last three months. With this change of policy, customers who had been previously counted were suddenly now non-active. In discounting these subscribers, Vodafone was merely confirming what many in the industry already knew, in that one subscriber had more than one subscription. This was largely on the prepaid side, where customers are free to move from operator to operator.
This change in reporting effectively cut over 8 million from Vodafone's proportionate global subscriber base, with 12% of prepaid users, and 6% of postpaid deemed in-active. In doing this Vodafone removed a number of non or low revenue generating customers, effectively raising the ARPU.
Why Was It Done?
Vodafone UK (Q2 2001) is an ideal example, it has a higher prepaid segment (65%) of which 18% are deemed inactive.
<snip>
Vodafone has continued to report both active and registered subscriber base, whilst its registered base continues to grow, its active is variable.
Vodafone UK was not unique in cutting out subscribers, as mentioned above its subsidiaries followed suit, although operators in which it had smaller or minority holdings (Verizon Wireless) reported one-time adjustments in Q1 2001, with subscriber growth showing a 'blip', and then continuing to grow. The changes by the various operators were created by changes in prepaid counting policies and cutting out bad debt customers.
<snip>
The table [not available] shows a selection of the changes made around the globe. Where the key investor (Vodafone, mm02 etc) has made policy changes, the subsidiaries have followed suit. One notable absentee from the group is Orange, it maintains that it already operated with tighter policies on prepaid subscriber counting.
ARPU Stabilises
Whilst worldwide ARPU continues to fall ($35 at Q3 2001 - EMC World Cellular Database), it is doing so at a slower rate. This is largely due to western European operators' ARPU beginning to level off, and in some cases rise. Vodafone's three largest operators (Omnitel, UK Vodafone and D2) all are starting signs of recovering. north America also saw a resilience to falling values, with ARPU remaining in the high $40's throughout 2001. Prepaid ARPU continues to be a problem area with some operators. Western Europe and north America have the highest values, typically $15-20. <<
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The full report, around 40,000 words, is available from late December 2001 onwards:
EMC's Insight provides comprehensive review of the cellular world in 2001 with analysis and insights into market activity in 2002:
* State of the market at the end of 2001
* New handset launches in 2001
* The status of GPRS in 2002
* 3G roll-out and handset availability in 2002
* Markets to watch in 2002
EMC's Insights are available in printed format, CD-ROM (pdf format) or e-mail (pdf format)
Pages : 200
Price: GBP650/US$950
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- Eric - |
