MForum.ru
07.09.2005, "3GSM World Focus Online"
As their manufacturers and developers are keen to tell us, SIMs - and now USIMs - are more than the subscriber identity module that the acronym implies. They store personal phone numbers, text messages, value-added services and even position data of tracked animals. They are now, as Gemplus puts it, at the heart of hundreds of mobile applications and their memory capabilities are expanding to megabyte level.
They are also proving a problem for statisticians. Just ask companies attempting to compile reliable subscriber data for the Czech Republic and Lithuania, for example. In these territories penetration rates of near or over 100 per cent are being reported. The same goes for certain Russian cities. However, in part this is because bargain-hunting prepaid users are investing in SIMs and, as special offers run out, discarding them. In Russia especially, competition has been cutthroat, to the extent that one of the country’s major operators, Mobile TeleSystems, admitted recently that 20-30 per cent of Russian subscriptions were dual SIMs.
And there are other factors. According to a recent report by Analysys Research, The Western European Mobile Market: trends and forecasts 2005-2010, the wave of growth in penetration is driven to a great extent by the acquisition by existing subscribers of another handset or SIM card in order, for example, to have separate accounts for personal and business use; to use additional data-only SIM cards for datacards or Blackberry devices; and to keep separate SIMs for different service plans, such as daytime and off-peak calling. In addition, new SIM cards for machine-to-machine communication as well as the temporary classification as active of the 2G SIM cards of subscribers who have switched to 3G may inflate subscriber numbers, says the report.
So how do you find out how many unique users there really are? As Alex Zadvorny, an analyst with Analysys, suggests, sorting out the numbers may not be easy - especially when you add corporate accounts or people putting contracts under one name in a family. Or the same people subscribing to different operators. Could - or would - operators share such information?
Machine-to-machine communication, by contrast, is less of a problem - simply because, much as the industry would like it to be otherwise - it’s less of a market. “It’s really small - even in terms of numbers of SIMs,” says Zadvorny. “Even more small in terms of revenue - because obviously there is very little traffic in that sort of scenario. But going forward I would think it should be possible to classify most accounts as either personal or machine-to-machine. In fact from what I’ve seen, operators have a specific offering targeted at the machine-to-machine accounts and that’s something quite separate, so I’m sure they can classify it as such.”
So the main problem appears to be special offers - and not only in the developing world. “I spoke to some industry people in Sweden and they think that’s what drove multiple SIM ownership in Sweden as well,” say Zadvorny. “People essentially taking advantage of various offers and - for example - picking up the service provider with the best SMS offer and best off-peak or whatever is available.”
So how do operators compensate for the skewing effect on figures of the opportunistic customer? The confusion could be at least partly alleviated with general operator agreement on what constitutes an active customer, thus quickly removing SIM buyers who abandon the cards after an offer closes. And this does appear to be happening - slowly.
“It’s getting a bit more consistent now but historically it really depended on the operator’s policies,” says Zadvorny. “In the past some of them didn’t discard customers even if - for example - they were inactive for half a year or a year. But now the standard definition for an active customer in the industry is a customer that has used the service in the past three months. Some of the operators are now already only reporting active subscribers.”
For the moment, then, SIMs count, whether or not they relate to unique users. But is this important? And what incentive is there for operators to come clean - let alone cut back on SIM-based promotions? You could argue that figures that do not make it clear whether a user is unique or even active can be misleading and undermine the credibility of the operator community. “I’m pretty sure the financial industry will start asking for more useful numbers from the operators and operators will be forced at some point to at least talk about that and give some sort of indication what’s going on and perhaps quantify it,” says Zadvorny.
Then again, maybe the financial industry won’t have to bother. After all a side-effect of multiple SIM ownership is diminished ARPU - or worse. Just ask Smart Communications and Globe Telecom of the Philippines, operators that recently offfered a SIM-swap programme that enabled subscribers to transfer between the rival networks by simply swapping SIM cards at retail outlets.
So easy was it to do that the result was more than four million subscribers jumping between the operators each month to take advantage of offers such as free talk minutes and free fast food. The result? Higher churn, an unstable subscriber count and any increase in overall revenues undermined by the huge additional operational expense of the swapping programme. In case you were wondering, the programme has now been abandoned.
© 3GSM World Focus Online
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