A mobile phone for every living person in Western Europe: penetration hits 100%

So finally we have one region hitting that magical 100% penetration rate.

Informa, the industry analyst which reports the national and regional mobile phone subscriber data worldwide, has just revealed that the Western European mobile phone penetration rate has gone past 100%. In the current March 14 issue of Mobile Communications, Informa reports on Western European cellular phone penetration rates, country by country as well as the total Western European penetration rate. With France and Belgium the laggards at 80.6% and 85.6% respectively; and at the high end, leaders Italy (124.6%) and Portugal (118.3%), the Western European average penetration rate of mobile phone subscriptions is now 103.1% effective end of February 2006. Oh, I have excluded the tiny countries like Luxembourg with a penetration rate of 164% as obviously they are not typical for Europe ha-ha..

103%. Amazing statistic. First, for those of our readers who may be familiar with statistics from broadband internet or TV etc. These tend to be measured against household penetration rates. Mobile phone penetration rates are measured "per capita" or in other words they are counted against all living people in the country, including all babies 1 year of age who don't know how to speak and don't understand numbers; as well as the 101 year old greatgrandparents who can't hear and have forgotten numbers.

How is it possible to have 100% (or 124%) penetration rates as obivously the babies will not have phones, and probably many very old people will also not have them. It means that the young employed population carries two (or more) subscriptions. I've isolated the point at about 60%, after which every second new subscription is actually to a second phone. So for example in Germany, with a penetration rate of 92.6%, roughly 76% have one phone and 16% have two phones. Or in the UK, with a penetration rate of 114.8%, roughly 87% have one phone, and 27% have two phones.

For some global contrasts. America is the big laggard with mobile phone penetrations. They are nearing 70%. Canada is dead last among industrialized countries with cellphone penetrations at under 60%. Japan is at about 75% and South Korea over 80%. In Asia Singapore is past 100% but the Asian leaders are Hong Kong and Taiwan both in the 125% range, with Israel also in the 120% region.

China is the biggest single country by cellphone populations and their national penetration rate is at over 30%. India is the fastest-growing country adding a couple of million new subscribers per month but is still under 10%.

Worldwide we are currently at about 2.2 Billion mobile phone users, with a global penetration rate of well over 30%; the cellphone is the most widely spread technology on the planet. Three times as many mobile phones as PCs of any kind, over twice as many mobile phone users as internet users, and more mobile phones than cars, more mobile phone users than people with credit cards. Twice as many people use SMS text messaging worldwide than use e-mail.

So we celebrate 100% penetration rates in Europe. Quite ironic, actually, that Business Week this week has a story about American mobile phone penetration rates being at "near saturation." Utter nonsense ! From their 70% the American market will add at least half as many mobile phones before they are anywhere near saturation. For if the Italians can go past 100% penetration, and the British can do that. And the Swedes. And the Israelis, And the Singaporeans. And the Taiwanese. And the Hong Kongers. And the Portugese, Finns, Danes, Irish, Norwegians, etc. Why on earth would Americans NOT follow the trends seen in absolutely every industrialized country (apart from Canada, which follows a year behind USA).

Still, 100% penetration rate in Western Europe. 402 million mobile phone subscriptions. Thats quite an amazing statistic. Oh, and yes, they are STILL GROWING strong. It doesn't stop here. Even Italy grew last year still at a rate of 12%, so don't think 120% is the "ceiling."

Comments

[manjara]

Perhaps you mean SIM cards when you say phones?? Personally I have about 4 phones and about a dozen SIM cards. 4 UK, 1 Swedish, 2 Portuguese, 1 Dutch, 2 Thai, 1 Sri Lanka, 1 Hong Kong plus a few that I've lost along the way (they are easy to lose!).
That's the primary reason penetration rates are so high, because there are so many inactive SIM cards. It would be interesting to see a statistic on mobile phone subscriptions that made an outgoing call in the last month. I suspect the number would be, as you said, nearer to 60%, but probably even lower.

[Tomi T Ahonen]

Hi Manjara (again!!)

You are partially correct in your assumption. It is mobile phone subscriptions (you could say "SIM cards" in the GSM world where SIM cards are used or about 75% of all mobile phone subscriptions ha-ha)

But these are the reported active users. Network operators regularly have to remove inactive subscribers from their accounts. The frequency how often they do this depends a bit on the local reporting requirements such as with accounting cycles and the requirements of their auditors etc.

As to actual users vs subscriptions. There is not a perfect count as competitor network providers do not give this level of their proprietary customer information to their competitors. So in the USA Sprint would not share with Verizon and T-Mobile who are their subscribers so that Verizon and T-Mobile could identify which of their customers might have a second subscrption with Sprint etc. (UK substiute Vodafone, Orange and O2 for the above example).

We know that there are multiple subscriptions, obviously, but don't know the exact number. There was a recent estimate suggesting that at the end of 2006 there would be 200 million people with multiple subscriptions. These tend to be with the young employed part of the population in wealthier countries. Obviously a parent will not give a bunch of phones and subcriptions to a teenager ha-ha, and the elderly are still trying to get to terms with the first phone, far less to handle two or more phones/subscriptions.

Also as a separate issue, in markets with multiple technologies typically it is not possible to switch SIM cards. And in some markets phones are "SIM-locked" meaning that at least superficially the phones will reject an alien SIM card. Yes, there are illegal shops to get around this, but again, not all "typical" phone users feel comfortable going to an illegal shop to break the SIM lock..

But yes, the 103% penetration rate is based on active users, but yes, as I think I already wrote in my blog (I hope I did), this includes people with multiple subscriptions and/or phones.

Tomi T Ahonen :-)

[Bob V]

Why is it that these young people have multiple mobile phone subscriptions? It isn't obvious to me what utility they would get out of it. (Maybe I'm new to the party.)

[Tomi T Ahonen]

Hi Bob V,

Good question. We observed it first obviously in Finland from about 1999 and I was the first two write about it in a book in my second book, m-Profits in 2002, so I've had quite some time to ponder that proposition. There are actually quite many reasons for it.

First - the most common earliest group to get second phones are young employed people in the kinds of jobs where they get cellphones from the employer. Some employers have limits on personal calls, messages and web surfing (and many limit use of payments such as buying coca colas, paying for parking etc).

So as the young are very clearly addicted to the phone and are willing to experiment with services etc., they will soon discover the potentials of the phone, and if their employer limits this kind of use, they want another phone to do the cool stuff.

The second biggest reason is price plans. If you are on one network, and your new partner is on another network, it makes sense to get another subsciption as there is likely a lot of telecoms traffic between you. You then switch phones a bit in terms of who is on what network. Same is buckets and on-net off-net types of situations and evening specials and weekend offers etc. So if one carrier provides free evening calls, the other gives low cost weekend calls, you switch phone behaviour on those times, etc.

A third big reason is related to the first. Many employers will give a phone for personal use as well, as long as the employer agrees to take calls and messages on their free time, in effect to be "on-call" over the weekend and evenings. Some feel this is an intrusion, they take the cellphone for office hours, and then leave it at the office, and get a personal phone for private time. OF COURSE they carry the personal phone during daytime at the office as well...

A big problem for the industry is handset subsidies (the free phone with the 18 month subscription package). This promotes churn. This also results in customers running after the latest coolest phone, and easily collect subscriptions on many networks that are in various stages of disuse towards the ends of their contract periods.

Then there are pure technical network coverage reasons. You get one phone and service. Are happy with it. Then you notice that your golfing club has no coverage, but a golfing friend shows his phone on a rival network maintains coverage. You get a second subscription to gain this coverage.

There are more reasons, but these tend to be the big ones.

It is important to keep in mind that the second phone phenomenon is ONLY relevant to those who are addicted to the phone. If you hate your cellphone, then you would never carry two.

If you have two phones and subscriptions, you can start to do various games with it. You make selections on the specific tasks. One is the bulkier heavier all-inclusive phone for work with e-mail and web and speakerphone and WiFi etc. The other is the slim sexy night-time phone for clubbing and partying that fits in the tightest jeans.

Some people like to show off. Then they can play phone power-games in meetings etc, pulling out both (new shiny top-of-the-line phones) to impress the others about how important he/she is (ha-ha, sounds very familiar to anyone whose seen a certain 3G telecoms author/consultant named Ahonen)

All of these issues result in a radical change in the marketing of mobile operators/carriers. No longer is it like BMW vs Jaguar, you own one car, and maybe switch with the next purchase. Rather it is like Coca Cola and Pepsi, where you may well have both brands in the fridge at any one time..

And yes, I currently walk around with 3 cellular devices. My top-of-the-line PDA-phone, my megapixel musicplayer smartphone, and my 3G modem card for the laptop.... 3 times 3G ha-ha...

Thank you for writing Bob, more about second subscriptions in my second, third and fourth books.

Tomi Ahonen :-)