Number Fudging in the Wireless Industry

Recently, I've been becoming increasingly aware that the mobile/wireless industry often plays fast-and-loose with statistics. It does this both to appear good externally (to investors, commentators, regulators, and scaring competitors) and as a form of "positive affirmation" internally (OK, OK, self denial....) when it is confronted with unpleasant truths.

Before I get a flood of emails, obviously the mobile industry isn't the only one that plays with numbers to put a positive spin on things. The marketing industry's use of surveys does the same thing across every segment from cars to chocolate to (I imagine) industrial waste disposal. Most government bodies do the same as well (step forward Tony, Gordon & Ken, in particular.....)

I suspect that this will be an ongoing theme, but I'd like to try and compile a "top 10" list of numeric fudges. Let's see:

1) Subscribers = Users
- Fudge: multiple phone/SIM ownership by many people

2) Overall ARPU numbers
- Fudge: exclusion of rebates, and similar repayments that come out as "costs" rather than lost revenue

3) Data ARPU (1)
- Fudge: Inclusion of revenue from enterprise & data-only devices (laptop cards, M2M modules, Blackberries) aggregated in non-SMS Data ARPU, and then using the figures to suggest that consumer use of content/MMS/etc is rising faster than it actually is

4) Data ARPU (2)
- Fudge: Revenue allocation of bundling. So, I get 250 minutes + 500 texts per month for £30 (+ video / MMS / whatever). How do they decide that "inside the bundle" 1 min = 5p / 1 text = 10p ... or 1 min = 3p / 1 text = 14p ? How is this audited? How much "arbitrariness" is there when operators report "Data ARPU was 19%"?

5) Coverage %
- Fudge: it's outdoor coverage, bizarrely using "percentage of population covered". Which is strange, as I always thought that most of the population lives indoors.

6) Radio downlink speeds (for 3G, or WiFi, or WiMAX or whatever)
- Fudge: what's the aggregate capacity of the cell? so, how many concurrent users of your 1Mbit/s HSDPA saturate the base station, or its backhaul?

7) Comparisons mobile vs. broadband
- Fudge: comparing apples & pears - people vs. households. Sometime useful, but often irrelevant as both are important metrics for different reasons.

8) Comparisons of mobile phones vs PCs
- Fudge: no, most people's "computing experience" won't be on phones, even in developing countries. Have you been to many developing countries, Mr Marketing VP? Seen kids packed into in Internet shops using MSN & doing their homework? Stop using the (equally spurious) home PC penetration figures & understand the real world

9) Early mobile application market growth numbers
- Fudge: often include substantial "internal" use by the mobile industry itself - application developers, competitors, journalists, testing (including automated network probes) etc, rather than "proper customers"

10) Smartphone market size
- Fudge: Includes a huge number of "closed" operator-customised phones developed on theoretically open OSs (eg DoCoMo FOMA use of Symbian & Linux) which are locked-down for 3rd-party software, plus a vast number of Nokia S60-based devices bought by people who neither know nor care that their device has an open "smart" OS. The proportion of smartphones bought by individuals who knowingly choose an "open" & flexible software platform is probably less than 20%.

I'm sure there's loads more of these type of things.... any suggestions?

Comments

[Ruski]

Dean, this is a great comment. And the list goes on and on when you think about it. Just one example, "Handset sales" - is it volumes just shipped into the retail channels or is it really to end-users.

Just after listening to management at the Motorola CMD, you really get 'inspired' by how companies twist practically everything to their own favour. MOT in 3G WCDMA infrastructure is one good example of a "success story" about to only get better when they now unite in a JV with another loser, Huawei.