Mobile coverage

by Stubborn Mule on 12 February 2011 · 7 comments

A friend and regular Stubborn Mule reader drew my attention to an article in the Sydney Morning Herald this week about the Australian telco Telstra. Much of the recent commentary has focused on the implications of the national broadband network (NBN) for Telstra. While the NBN certainly gets a mention here too, for me the most striking paragraph deals with the extraordinary success Telstra has been having of late in the mobile phone market:

In the December half, the group added 420,000 bundled customers — customers on bundled deals tend to be “stickier” and stay with a telco longer than those who sign on for only one service — and it added 139,000 retail fixed broadband customers. Most importantly, it added 919,000 mobile phone customers: that’s the biggest mobile phone customer growth Telstra has produced for more [sic] a decade.

Gaining almost 1 million new customers in six months is quite an achievement in a country with a population of around 22 million. My own experience may shed some anecdotal light on Telstra’s success. I switched from Virgin mobile to Telstra late last year. The main reason was network quality. Virgin use the Optus network which I found extremely unreliable, even in central parts of Sydney. Sitting in a café in Glebe with no signal and seeing the person next to me with four bars on a Telstra phone had become too much. Customer service did not come into the decision: as far as I can tell, all the providers are equally atrocious on that score. So that just left price. When I first signed up with Virgin a couple of years earlier, Telstra may have had the superior network, but charged a hefty premium for it. But since then their prices have become far more competitive, which made the decision to switch very easy. I know a number of other people who have switched for exactly the same reason.

Even so, 1 million new customers is an impressive result for such a short period of time. This prompted my source to do some further research. According to a Wikipedia article about mobile phone penetration, in 2006 Australia’s population of 20.8 million owned 19 million mobile phones*. By 2007, that figure had grown to 21.3 million while the population was up to 21.2 million and so there was more than one phone for every man woman and child in the country. I have no doubt that the number of mobile phones has continued to grow faster than the population since then.

But despite over 100% mobile phone penetration, Australia is far from being the country most in love with mobile phones. The chart below uses the Wikipedia statistics to show the top 20 countries and the statistics are intriguing and not a little mysterious.

Top 20 Countries by Mobile Phone Penetration

Montenegro is clearly in the lead with almost two phones per capita. There is a bit of a drop down to Saudi Arabia with a penetration rate of 170%. On 151%, Hong Kong comes in third and leads a closely packed group all close to the 150% mark. Continuing down the list, penetration rates fall gradually down to Chile at 113% which means that Australia does not even make it into the top 20. In fact, even New Zealand ranks higher in 23rd place, while Australia is only in 31st place.

Of course, differences in timing of both the phone and population figures mean that the Wikipedia article will not be very accurate, but the overall picture remains impressive for someone like myself who is old enough to remember a time before mobile phones. And if anyone has any theories why Montenegro has so many mobile phones, please share your theory in the comments below!

* Unfortunately the Wikipedia article cites no source for the 19 million figure. Population statistics are sourced from the Australian Bureau of Statistics.

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{ 7 comments… read them below or add one }

1 Nova Sean February 12, 2011 at 2:07 pm

Having lost one or two days work due “No Service” messages count me amongst the hordes heading to Telstra once the iPhone 5 comes out.

2 Danny Yee February 12, 2011 at 8:35 pm

One day I’ll succumb – I’m having fun using a Kindle at the moment.

But I don’t want a mobile phone. I want a mobile data connection over which I can run telephony applications if I so wish.

3 Magpie February 13, 2011 at 10:31 pm

@Sean and Danny

Man, I knew I was unique, but this is ridiculous: I’ve gotta be the only Aussie without a bloody mobile!

Danny, you mean you don’t have a mobile, either?

4 Paul February 14, 2011 at 3:44 pm

Yes

I abandoned the Optus ship last year when the Telstra pricing became competitive.

There was a great improvement in the network quality.

$49 for 1G of data and more than enough calls than I will ever make.

A data only connection so you can use a telephony app would be nice but I think we may be waiting a long time for that.

Possibly those countries with huge usage figures have large prepaid SIM deals and limitations on number portability. It may be that users maintain a number of SIM’s or mobile phones (a Telstra mobile, an Optus mobile etc) and use them depending on network quality or plan charges. For example: they may have a work phone that has good deals for work related calls, a phone they use for family and a phone for when in the north of the country etc.

5 Matt February 18, 2011 at 6:25 am

My guess about Montenegro is the economies play out more in favour of multiple phones. In some parts of the world having more than one number is great since a) the cost of getting a new number is small and b) you can use the cheapest carrier at all times. For example, if a new number is $5 and you can get free calls within all local networks (i.e. free telstra-to-telstra) then you only need to make $5 of calls to friends on another network to make is cheaper to get a new number. In Australia the barrier to entry is high (you normally need a contract to get the best deals) and the benefits are relatively small.

6 Stubborn Mule February 18, 2011 at 7:46 am

A very plausible explanation. Thanks Matt!

7 Tim Watts February 21, 2011 at 10:02 am

Consensus amongst my telco peeps on Twitter is the Montenegro would be an outlier because:

1. Montenegro’s relatively large tourist numbers. Population: ~670,000; tourists per annum: ~1 million.
2. Tourists are relatively wealthy – all want to use phones.
3. It’s not a member of the EU and doesn’t benefit from Telco reg harmonisation
4. Mobile roaming rates are likely to be v high.

The combination of the above would easily give you the result you see in the data.

BTW: ACMA’s 2008-9 Comms report puts Oz mobile SIOs at 24.2 million http://bit.ly/hQZetT

Likely

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