Comments on: Other point of view on ConsultantValueAdded's post "Unregistered prepaid clients switch off? No business sense." http://blog.doppelhammer.com/mobile/other-point-of-view-on-consultantvalueaddeds-post-unregistered-prepaid-clients-switch-off-no-business-sense/ by Jochen Doppelhammer Mon, 29 Mar 2010 10:22:15 +0200 http://wordpress.org/?v=2.9.2 hourly 1 By: Augusto Baena http://blog.doppelhammer.com/mobile/other-point-of-view-on-consultantvalueaddeds-post-unregistered-prepaid-clients-switch-off-no-business-sense/comment-page-1/#comment-9 Augusto Baena Sun, 06 Dec 2009 09:04:36 +0000 http://jochend.wordpress.com/?p=41#comment-9 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 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

]]> By: Carlos http://blog.doppelhammer.com/mobile/other-point-of-view-on-consultantvalueaddeds-post-unregistered-prepaid-clients-switch-off-no-business-sense/comment-page-1/#comment-5 Carlos Fri, 30 Oct 2009 14:50:05 +0000 http://jochend.wordpress.com/?p=41#comment-5 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 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

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