PricewaterhouseCoopers released two wireless industry reports: its annual North American Wireless Industry Survey, as well as its point-of-view report on Wireless Customer Profitability.
The PricewaterhouseCoopers 2009 North American Wireless Industry Survey is an annual publication that covers the financial and operational reporting policies and practices of wireless service providers. The 2009 survey comprises U.S. and Canadian companies and is conducted by PwC’s Entertainment, Media and Communications industry practice, which prepares the survey questions, solicits company participation, and compiles and analyzes the survey results. The survey period covers year-end 2008 as well as certain information as of June 30, 2009. Companies participate voluntarily, and individual survey results are kept confidential by PwC.
From their synopsis:
With US consumer mobile penetration near saturation, soaring retention costs, consumer price sensitivity and surging data traffic demands, PwC contends that mobile carriers must look beyond market share to advance their growth and profitability. The reports highlight the state of the wireless sector and provide insight on how carriers will need to find growth by making existing customers more profitable and less by finding new customers. Provided below is the press release.
The survey finds that the downturn in the economy triggered an increase in consumers moving towards prepaid plans. On average, use of prepaid minutes increased more than 147 percent in the past four years, from 270 minutes in 2006 to 667 minutes in 2009.
Change is in the Air finds that smart phone sales are increasing and represent significantly higher average revenues per user (ARPU). As of June 30, 2009, 21 percent of all mobile device sales were smart phones, and an average of 12 percent of overall subscribers use smart phones. The average revenue per user for smart phones is $74 compared with total postpaid average revenue of $54.
Despite the difficult economy, carriers are continuing to invest in the network and infrastructure to address increasing data demands and are beginning to migrate towards 4G technology. The survey cites on average, capital expenditures as a percentage of service revenues increased to 21.5 percent in the 2009 survey from 18 percent in the 2008 survey.
As carriers seek to reduce costs and exert an impact on environmental issues, electronic payments are becoming more significant. The survey reports that average percentage of postpaid subscribers receiving paper invoices decreased from 81 percent in the 2008 survey to 72 percent in the 2009 survey, and the average percentage of subscribers that received electronic invoices increased from 6 percent to 14 percent during the 2008 to 2009 survey period.
PwC’s analysis concludes that every customer from the premium smart phone user to the pre-pay consumer can contribute to profitability and growth. According to Point of View: Wireless Customer Profitability, mobile carriers will need to adopt a granular point-of-view to:
· Gain more clear insights across the customer base into who contributes to (and detracts from) profitability.
· Adopt targeted and scaled strategies to ‘go the extra mile’ for high-performing customers and to more carefully mitigate the costs of unprofitable customers.
· Develop customized tools that ensure every touch point-initial contract, handset subsidies, service and retention efforts-keep the bottom line of that unique customer in mind.
· Craft tiered pricing options based on the cost profiles of different customers (e.g. smart phone users v. less data-intensive customers).
The full report and the accompanying point-of-view are available HERE