Carlos,
your post http://consultantvalueadded.com/2009/10/26/unregistered-prepaid-clients-switch-off-no-business-sense/ made me post a comment, so objective achieved.
While agreeing with you that the law lacks common business sense, I don’t agree with some of your conclusions.
1. the law exists in all European countries, just in different degrees. Other European countries require registration of prepaid cards, but don’t require verification of DNI.
2. I don’t agree that Spanish MNOs will loose 9 mio customers. what will happen is that the Spanish market is finally cleaned up of it’s inactive SIMs and market penetration gets closer to reality
3. I think ARPU could in contrary go up for above mentioned effect. less inactive.
4. Actually I think it’s a great opportunity for teh new alternative MVNOs, because they will capture a big junk of customers that so far just for inertia have not switched operator and are now forced to do so.
So, while the implementation makes no business sense for lot’s of reasons, e.g. disadvantages for MVNOs with alternative distribution channels, for the market it could in fact be healthy.
just a different point of view ;-)
2 responses so far ↓
1 Carlos // Oct 30, 2009 at 3:50 pm
Jochen
Good to read you…. however:
1. Considering just a business perspective, there’s no need to even register the prepaid cards. Law should be followed but, as written in the post, it’s another major blow against the right to privacy and the presumption of innocence.
2. I tend to agree with you. The figure was taken from elmundo.es and the day after cincodias.com reduced that figure to 4 million.
3. ARPU calculated as revenues / active clients will increase because operators will count less clients but the reality is that the real consumption will be the same and that today’s trend of ARPU dilution across operators and countries will continue.
4. Agree. Did you ever worked for a MVNO? Ah yes, I forgot, you were Simyo’s CEO.. ;)
Fair comments gent! Abrazo
2 Augusto Baena // Dec 6, 2009 at 10:04 am
IMHO, this a bit like the no-liquids-in-plane rule, hysteria-driven rule that has so many loopholes (in Madrid you could print 50 copies of your boarding pass, so 50 people could gather together in the boarding area with as many 100ml bottles as required) that renders it impractical, but still expensive to apply and troublesome for airports, airlines and users, except for the side “benefit” of keeping people scared to death (which is detrimental to travelling).
To believe that a potential terrorist will have problems in finding a working SIM (or that, knowing the rule, he won’t make sure he cannot be tracked back) is just hilarious. I even doubt it has any value in court for criminal prosecution (what about shared, stolen and/or second-hand SIMs?)
Even admitting Jochen’s point that it might clean part of the inactive SIMs (so bringing penetration closer to reality, increasing ARPU, etc) I believe the impact on market KPIs in the short-term shouldn’t be so dramatic as most of the double-SIMs are churn-related: every time a prepaid user churns, the “old” SIM remains active for 3-months, so in practice, one-quarter of prepaid churners in the market generate double SIMs, and this will continue being so as long as prepaid users continue churning to benefit from acquisition promos.
IMHO, the impact on the market as a whole will be negative as:
a) It increases the barriers to churn, thus benefitting larger MNOs with a free loyalty program
b) It complicates alternative distribution channels, including super-distribution schemes
c) It might leave out of the market a number of illegal immigrants (though not all), which are not few
d) It puts a brake on some sales situations (eg SIM as a present for somebody else, impulsive buying, etc)
e) As the sales process is more complex, the cost of selling increases (more salesmen support required), thus increasing ARPU required for breakeven, again bad for bottom-of-the-pyramid growth
My two cents
Augusto Baena
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