WASHINGTON-Subscriber numbers are an important metric for the wireless industry because the industry is still growing, so an inquiry by a federal agency into how those numbers is calculated is important, said Rich Nespola, chief executive officer of the Management Network Group (TMNG).
“In wireless today, it is still a land-grab opportunity, so subscriber growth is something that all analysts look at,” said Nespola.
Even though all analysts look at subscriber numbers, they are at the mercy of wireless carriers to know how many subscribers they serve because there is no independent way to figure this out, said Nespola.
Nespola said he found the Securities and Exchange Commission’s recent inquiry into telecommunications subscriber numbers-first reported Thursday by the Wall Street Journal-interesting.
“Why isn’t the Federal Communications Commission asking these questions?” asked Nespola. “The FCC has a right to audit, or it could go to the Cellular Telecommunications & Internet Association and ask for all of this information.”
CTIA keeps a running tab of industry subscriber numbers on its Web site. As of Friday morning it read, “165,780,688 Current U.S. Wireless Subscribers.” This is a compilation from its members who give the information to an independent accounting firm under non-disclosure agreements. CTIA receives only the totals, said John Walls, CTIA vice president of communications. “The only numbers we ever see are the totals. We don’t ever get any specific carrier information.”
The FCC gives carriers some guidance on how to determine subscriber numbers in the directions on its Form 477, which it uses to examine the extent of broadband deployment. There are no separate rules for wireless carriers.
Nespola said he believes wireless carriers generally report their subscriber numbers accurately, but the SEC inquiry gives them a chance to go back and verify their processes and numbers.
“A lot of this can be done innocently without malice or forethought and in an industry with high dynamic and growth, churn and then you add wireless local number portability, it adds a reporting challenge,” said Nespola. “It is a worthwhile question. It provides the carriers the opportunity to go back and verify their numbers since with LNP there could be some room for error.”
Verification appears to be a key component. Verizon Communications Inc. filed information with the SEC late Thursday indicating it had overstated its subscriber numbers by 8.5 percent but a Verizon official said the change had no relation to the inquiry.
