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Subscriber Acquisition Costs are Ten to Twenty Times Lower in Developed Markets, says Pyramid Research

Cambridge, MA, September 28, 2006—Subscriber acquisition costs are ten to twenty times lower than they would be for a carrier in developed markets, and a hundred times lower in more extreme cases according to Pyramid Research’s latest Analyst Insight.

“Because the subscriber base is primarily prepaid-based and churn levels are high, spending inordinately to acquire subscribers does not make economic sense,” comments Guy Zibi, Director of CMT and author of the Insight.

In the Insight, Zibi found that low subscriber acquisition costs are underpinned by a basic tenet: no subsidies. In developed markets, subsidies can account for as much as one-third of overall subscriber costs, with the balance going to channel commissions and marketing and promotional expenses.

“Some emerging market MNOs are still involved in selling branded, locked handsets, but their impact remains marginal, primarily owing to the volume of handset provisioning generated outside of legal or formal channels,” concludes Zibi.

To learn more about declining SACs, please download this Analyst Insight written by Director of Communications, Media and Technology at Pyramid, Guy Zibi: http://www.pyr.com/downloads.htm?id=6

About Pyramid Research
For twenty years, Pyramid Research has helped companies in the converging communications, media and technology industries stay ahead of market trends, understand competitive threats and capitalize on opportunities.  We advise the world’s leading vendors, service providers, equipment manufacturers, and the financial community on how to implement best practices, build offensive growth strategies and drive profitability.

Press Contact:
Amalia Vega
Pyramid Research
P: 617.494.1515 ext 231
E: avega@pyr.com

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