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Some numbers on new subscribers and second subscriptions

Picture of Tomi Ahonen
Some numbers on new subscribers and second subscriptions
by Tomi Ahonen - Wednesday, 12 November 2008, 11:10 AM

There was some good data on the 27th October issue of the Financial Times about mobile phone sales, quoting Societe Generale information. They said that in 2007 there were 1.15 billion new phones sold (other sources have said 1.2 or even 1.25 B).  But the interesting part was that they split it up as 805 million went to existing customers and only 300 million phones sold to new customers.

Then when we map that against the total subscriber growth in 2007, which was 600 million (from 2.7 billion to 3.3 billion, according to Informa and GSM Association etc) - we arrive at an interesting observation. 2007 became the cross-over year, when as many phone subscriptions were sold with a phone, as without a phone. So half of the new subscriptions of 2007 were sold to customers who already had a phone - ie are multiple subscriptions.

Note that also some of the new phones with subscription go to people who go from one phone (and subscription) to two - for example many iPhone owners had another phone and account as well, such as a Blackberry - it means that now we are in an age where more than half of all new subscriptions go to multiple subscriptions worldwide..  Interesting times. Already in 2007, Informa told us 28% of all phone subscriptions were multiple subscriptions and in Europe more than half were so.

Now that trend only accelerates. I think its a high time for all mobile operators to recalibrate their marketing activities for those multiple subscription customers - starting with attempting to determine which of their customers are of that type..

What do you think? Time for the other big handset makers also to release multi-SIM phones like Samsung? How can operators market to multi-SIM owners who intend to split their traffic? What is the role of MVNO's in this space..

Tomi Ahonen / HatRat    :-)

Picture of Dean Bubley
Re: Some numbers on new subscribers and second subscriptions
by Dean Bubley - Wednesday, 12 November 2008, 12:24 PM

Different tactics apply for different multi-SIM scenarios in my view.

Operators are already trying to link customers who have both a phone and a laptop/dongle (eg discounted mobile broadband subs on 3, for those with a mobile phone contract already)

Slightly more tricky in the scenarios of separate personal & work SIMs, although some operators offer good deals to large customers' employees (my brother gets a cut-price personal Orange tariff through his employer, a large bank)

The one which doesn't work well is those people who have 2+ SIMs for tariff arbitrage purposes, eg in countries which don't bundle x-network minutes as well as on-net

Picture of Tomi Ahonen
An insight in that observation - Some numbers on new subscribers and second subscriptions
by Tomi Ahonen - Thursday, 13 November 2008, 4:50 AM

Hi Dean

Good points. I think there is a really powerful insight in that last observation of yours. If in any country there are operators who give bundled minutes for "on net customers" ie calling other customers on that network - but then charge higher costs for calling people on rival networks - this would boost the price-sensitive customers to want to get multiple subscriptions - one for each network - to optimize the costs.

But if the operators offer same price minutes to all mobile networks in that country - like they do in the UK for example - then this need is strongly diminished..  Perhaps one of the tools to combat the hidden churn of multiple SIMs is to offer the free minutes bundles to all networks.. ?

Tomi Ahonen / HatRat    :-)

Picture of Martin Powell
Re: An insight in that observation - Some numbers on new subscribers and second subscriptions
by Martin Powell - Thursday, 13 November 2008, 9:08 AM
Hi Tomi,

Agree that one rate for on and off-net calling plans are the way to go. What about the prepay markey though? I'd guess that a large proportion of (non-dongle) customers with multiple SIMs have at least one of them on prepay. Marketing to customers who have one handset on a contract with say Orange and a second handset on prepay with 3 is quite a challenge. As an operator you're very unlikley to know about your customer's second SIM owned by your customer. So broad band approaches like better off-net call and text rates work, but a more targetted approach is hard becuase they can't identify the target.

Would be interesting to know if anyone has a cunning marketing plan to get round this one. I think proliferation of 2nd SIMs shows customers have an eye on what's available and are much less loyal that the MNO's would like them to be.

Picture of Carlos Jordan
Re: An insight in that observation - Some numbers on new subscribers and second subscriptions
by Carlos Jordan - Thursday, 13 November 2008, 11:27 AM
Hi Dean, Tomi and Martin

In my opinion the key is to be able to offer similar advatages to its custmomers as the ones we can find on the market.
The first is, as Dean said, the wide range of scenarios pushing users to become multi-SIM owners. In order to improove the visibility on this topic, I am going to try to deepen on scenarios available (some of them you have already mention) and give some clues on how operators should proceed.
  • Split personal and work (usage, bills...). For this there could be a solution such as SingTel offering 2 numbers in one only SIM card http://www.cellular-news.com/story/14803.php and I found on the net that most SIM cardscan manage two mobile numbers simultaneaously (if someone can confirm it could be great) http://forum.orange.fr/liremessages.php?idsection=1958&thread=23575 (sorry in French)
  • Tariff arbitrage : This is more complex as scenarios very according to tariff plan schemes ad-ons available.
    • On-net / off net tariff discrimination,
    • Abondance offers (like unlimitted calls for a time frame), In Spain Orange launched unilimitted calls to any mobile and fixed (premium numbers not inluded) for 20 € / month from 6 ? pm to 8 am. So lot of people subcribed that offer keeping their old mobile number to place callsfrom 8 am to 6 pm and also receive calls all the day (because this continue to be their main mobile line).
    • Exlusive paired numbers (Purchase Two SIM numbers and get ie: 1 cent à minute rate for ever (for calls made between those two numbers) this was extreamly succesful when AMENA (since 2006 Orange) launched its operations in Spain, Day plans versus evening plans,
    • Frequent travellers, those frequent travallers. Vodafone in Italy offered Vodafone Five senza frontiere http://www.areaaziende.vodafone.it/190/trilogy/jsp/channelView.do?pageTypeId=9612&channelId=-8706&contentKey=26751&SR=1&SC=five+senza+frontiere or O2 with "Ireland bolt on"
For all this cases, operators should be able to offer the same tariff advantage than their competitors offer through specific tariff plans and adds -ons. As far as I remember, Orange did so in the UK with its Orange Value Promise (years ago).
Now this could mean that a customer could keep its "main" tariff plan and overlap it with an add-on following the same pricing scheme than the one that makes the use become multi-SIM. For instance, in Spain I am Movistar customer, If I am interested in evening unlimitted calls tariff plan I will subscribe (20 € / month) an Orange tariff plan. But, If Movistar provides an add-on with unlimitted calls "caeteris paribus" (same time frame and monthly subcription and conditions) I will subscribe that new add-on instead of taking a second mobile number.
This is to be studied in each country for each scenario but the key is to provide similar advantages to its customers.
  • Multi equippement (laptop, mobile), here the solution should be the one pointed out by Dean, specific discounts for exisiting customers (3 UK).
  • Coverage,this was true years ago (90s) and become important for 3G and 3G+ users (mainly for USB modem users), the only solution here it is to work on coverage and QoS.
On the other hand, to explain why operators are not very active fighting against that customer and income excape, I think they cannot say whom of their customers are milti-SIM owners. They should work on datamanning analysis. One exemple, I travel at least twice a month to France. And my operator Movistar send me always the same standard message when I am abroad reminding me that I can take advantage of tarif its Daily Tariff while abroad 1,15 € per day (only charged if I place or receive calls) and lower than standard rates per minute. But if they analyse my account they should appreciate that I almost never use my mobile Movistar line during my stays in France. So they should imagine that I have a French mobile line.
Another exemple for 3G laptop/dongles. I take from 4 to 8 fights per month mostly in week days. As I stay at the airport, the operator should be able to identify me as a professional or business men or whatever. They can check that I do not use data at all nethier I have a data plan with them. So the conclusion should be either I do not have or use a laptop while travelling (to access Internet) or I have another SIM card that I use while travelling....

Operators have a lot to do in this way. More efficient data proccessing to improove.

Other important factor is that operators are not willing to start a price war with its counterparts as they cannot calculate the consequences in termes of ARPU.

Finally regarding MVNOs, I would like to mention Transatel an international operator that offers advantageous tariffs for travellers in France, UK Netherlands, Luxembourg...).

That's all folks !