Mobile share market contested

Written by Cherelle Jackson
Monday, 07 April 2008
APIA, Samoa: Digicel Samoa Ltd last week claimed they hold 80% share of the mobile phone market in Samoa. This is according to Head of Marketing Mahendra (Mike) Mahimkar during a Digicel Press Conference last week. Mahimkar confirmed by phone that according to their calculations on the percentage of population who can use mobile phones, Digicel holds 80% market share. "That percentage is true to our calculations as of March 31st 2008,” Mahimkar told Newsline Business Review (NBR). He said that Digicel collaborated with the Statistics Department of the Ministry of Finance to calculate the percentage of population within the ages capable of using a mobile phone. “From the ages of 16 to 55 years it came to about 54% of the total population, which in numbers would be about 80,000 to 85,000 people,” Mahimkar said. From that total Digicel calculated that their users amounted to 80% of that number, meaning that currently the Digicel customer base stands at approximately 64,000 people. GoMobile The other mobile provider in Samoa, GoMobile was contacted for comment on the market share claim by Digicel. SamoaTel Chief Executive Officer, Mike Johnstone was asked if he refutes the claim and he said: “I am not really challenging that, what I am trying to say is that it is a meaningless claim, the real claim is on what the value of the customer represents and that’s what accumulates revenue.” Johnstone added: “I would say 80% is too high, because they might have a lot of phones which are never used. They have a number, but what is the value they represent?” According to the CEO, their calculations indicate that there are about 90,000 possible mobile users in the country. “If everyone above the age of 5 can have a mobile phone then about 120,000 people would be the total market, however the closest theoretical maximum number of people with phones in the country in 90,000,” Johnstone said. Currently GoMobile has a customer base of approximately 30,000 users. According to Johnstone, based on GoMobile approximations of the market the closest that Digicel can claim on market share is 70%. “I would say that 80% is too high,” he said. ARPU Johnstone told NBR that the real value of customer base lies in the length of time they use which reflects the number of talas they spend on the network provider. The technical terminology is known as Average Rate Per Minute of Use (ARPU). Johnstone said: “The real question is what the ARPU of those phones are, if you have a phone where you make a hundred calls, you use $100.00 then that is a high ARPU,” he said. Johnstone then went on to say about Digicel: “If you have phone which is prepaid and use less calls and spend less than $5.00 tala a month then with great respect that is not a very good business model and I would suggest that a lot of those phones (Digicel) are that.” Johnstone said that GoMobile holds 65% of the higher ARPU customers which include the business community. “Having market share is one thing and having ARPU is the real value of the customers,” he said. Facts Mahimkar could not be reached for a comment in regards to their ARPU, but NBR drew facts from both interviews. Currently Digicel estmates 80,000 possible mobile customers and GoMobile estimates 90,000. If the hypothetical market is 85,000, a compromise of both approximations, then that means Digicel has 68,000 customers which is about 4000 over their 80% share claim. But if the same hypothetical approximation is true for GoMobile then that means they have a customer base of 25,500, which is 500 customers less then their said customer base. But GoMobile has said they have 30,000 customers, so if the 85,000 possible customer market is a fair estimation then that means Digicel has 55,000 customers. However it is clear that both mobile companies have wide differences in market estimations, which therefore makes an accurate prediction of market share difficult. According to the 2006 Census Survey, 23,759 Samoans had cell phones at the time, however only 11,372 had operating cell phones. But the survey was conducted during the year when both mobile phone companies were introduced. There are currently no published records on the actual number of people who have access to mobile phones in the Samoa, so the jury is out on the real market share between the two mobile phone companies….NBR Comments (0) Subscribe to this comment's feed Write comment Name Email Title Comment
Last Updated ( Monday, 07 April 2008 )

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