Earlier today I filed a report that said Nokia’s Lumia 800 was the most popular selling device on Elisa’s network. Elisa being Finland’s largest wireless operator with 2,879,700 subscribers. For shits and giggles I went ahead and took a look at their Q4 2011 financial results to get a sense of how the company is doing. They are after all the operator I’ve been using for the past four and a half years. What I found was frankly shocking since I also track America’s top four wireless operators, specifically Verizon, not only because they were the first to launch a 4G LTE network, but also because they’re the largest thanks to their 108.7 million total subscribers; 92.2 million of them being retail customers. Here’s a few figures I want to highlight:
Verizon’s average revenue per retail customer per month during Q4 2011 was $54.80. Elisa lists their ARPU in three different ways: average, retail consumers, and corporate consumers. While it would be tempting to use the data that only specifies retail consumers, I’ll use the average instead since Verizon’s retail customers make up nearly 85% of their subscriber base. With that in mind, Elisa’s average revenue per customer per month during the same quarter was 19.10 EUR, which comes out to $25.30. That’s less than half what Verizon customers pay.
Another key metric is “churn”, which is defined as the amount of subscribers who leave or join a network during the quarter in terms of a percentage of total subscribers. Verizon’s “retail postpaid” churn was 0.94% in Q4 2011. Their total retail churn rate was 1.23%. Let’s use the bigger number here. Elisa’s churn rate during the same quarter was an eye opening 13.1%. That’s almost 10x more people coming and going! Why is this the case? Most Finns don’t sign contracts. They’re free to leave an operator whenever they want. Number portability is also mandated by law, so you don’t even have to tell your friends to update their address book.
While it’s unfair to compare an operator who services more than 108 million connections to one that services barely 3 million, I hope that those of you who keep on insisting that America is number one when it comes to wireless actually realize that you’re believing in fairy tales.
Oh and to twist the knife even further, one more stat: I pay ~ $13 per month for unlimited data. All data plans that Elisa provides are unlimited, you simply pay more for more speed, which is the exact same business model that most folks are already familiar with thanks to their home broadband connection. To be perfectly honest, I have no qualms being on the slowest tier available, and for the life of me I can’t understand people who feel the need to have a 50 megabit per second pipe connected to their Android smartphone.
Update: Thanks to Tomi Ahonen for bringing to my attention that Elisa’s churn rate is listed as annualized, meaning that 13.1% figure I mentioned above would be if you took into account the past 12 months. So if we divide 13.1% by 12 you get 1.09%, which is much more inline with Verizon’s numbers.
[Some back-story on the image above.]