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Not all companies report their financial metrics the same way. This became clear yesterday when international wireless carriers Vimpelcom and Orascom reported results that both showed data for their Canadian operation, Wind Mobile.
In the case of Vimpelcom’s 1Q13 results, we saw
| CANADA KEY INDICATORS |
| Mobile |
1Q13 |
1Q12 |
YoY |
| Subscribers (’000) |
602 |
415 |
28% |
| ARPU (CAD) |
31.6 |
27.3 |
16% |
Orascom also reported 1Q13 results yesterday, releasing its view of Canada’s Wind Mobile performance:
| CANADA KEY INDICATORS |
| Wind Canada |
1Q13 |
1Q12 |
YoY |
| Subscribers |
601,719 |
415,364 |
44.9% |
| ARPU (CAD) |
27.60 |
27.30 |
1.1% |
What is going on? Both companies are reporting the same subscriber figures; Vimpelcom rounds to the nearest thousand, while Orascom shows every subscriber. The change percentages differ – and frankly, I cannot reproduce the Vimpelcom change number. Clearly, Orascom took the growth in subscribers and divided by 1Q12 figures to come up with its report of change percentage.
But the more important question is how could both companies report different ARPU figures for Wind Mobile in 1Q13? Vimpelcom says it was $31.60; Orascom says it was $27.60. That is a $4.00 difference, representing a nearly 15% difference.
In today’s Globe and Mail, Rita Trichur got an answer from a Wind Mobile spokesperson who said the companies use different reporting methodologies.
What are the different ways that ARPU can be reported?
As the full name suggests, ARPU – average revenue per user – is a calculated average. Use revenues as the numerator, divide by number of users, et voila!
The differences are in what numbers are used for both the numerator and the denominator. Not all revenues are the same: does the company include non-recurring subscriber revenues in the numerator, such as handset sales, one time charges, etc.? In the denominator, different companies use different ways to count pre-paid subscribers. For example, if a prepaid card hasn’t been used in the recent past, it isn’t generating revenues, so should it be included in the ARPU calculation?
For financial reporting purposes, the most important consideration is consistency – enabling comparisons over time. As long as the method is unchanged between reporting periods, two companies can report the same key indicator differently, while both can be considered correct.
Yet another reason why care has to be used when trying to compare financial reporting data between different companies and different jurisdictions.
Spectrum policy issues are heating up as we approach the deadline for deposits for the 700 MHz spectrum auction. Will new entrants show up with deposits? Will rural Canadians actually benefit?
There is certain to be a lively discussion of wireless issues at a panel called “Unplugged: The next generation of wireless” at The 2013 Canadian Telecom Summit.
Earlier today, the moderator of the panel, Rita Trichur of the Globe and Mail, tweeted
Her story looks beyond the 700 MHz auction at the issues associated with the 3500 MHz band, spectrum that has been largely unused.
Internet service providers such as Xplornet Communications Inc. are accusing Rogers Communications Inc. and BCE Inc. of “hoarding” spectrum that they have held for years but failed to use. Now that those licences are up for renewal, Xplornet argues the companies’ ongoing control of those assets is stifling competition for Internet services in rural areas, to the detriment of some two million Canadians.
In an appearance on CBC’s The Lang & O’Leary Exchange, Open Media’s executive director, Steve Anderson, referred to Canada’s wireless policy as “incoherent”. [He went on to say things about Canada's Industry Minister Christian Paradis, including unexpectedly colourful language from a registered lobbyist. Earlier in the interview, Mr. Anderson confused Former Industry Minister Jim Prentice, who led Industry Canada at the time AWS spectrum was set aside for new entrants, with Tony Clement, the Minister who preceded Paradis.]
As I have written before, the challenge Canadians face might be better described as drifting rudderless. Wireless competition and spectrum policy are among the areas that have suffered from the absence of a comprehensive national digital strategy. How does this impact investment in networks? How are Canadians competing in a global digital economy?
You need to be at The 2013 Canadian Telecom Summit, just 3 weeks away. Have you registered yet?
Continuing Professional Development: Some of the time spent attending sessions at The 2013 Canadian Telecom Summit may be claimed as “Substantive Hours” towards LSUC’s CPD requirements.
Register today! Download the complete conference brochure here.
Among the new panels being introduced this year at The 2013 Canadian Telecom Summit, we have a session called “The Customers Speak Out”:
What are some of the issues that bother small and medium businesses?
How are consumers being protected?
Is enough being done to safeguard against abuses?
What should service providers be doing to improve their customer relationships?
What will be the kinds of enforcement measures expected from the CRTC?
You need to be at The 2013 Canadian Telecom Summit, just 3 weeks away. Have you registered yet?
Continuing Professional Development: We have been advised that some of the time spent attending sessions at The 2013 Canadian Telecom Summit may be claimed as “Substantive Hours” towards LSUC’s CPD requirements.
Register today! Download the complete conference brochure here.
As you may have read last week, Industry Minister Christian Paradis will be delivering the closing address on June 5 at The 2013 Canadian Telecom Summit. Will he use this platform to deliver Canada’s long overdue national digital economy strategy?
Over the course of the 3 day event, taking place June 3-5 at the Toronto Congress Centre, we will explore many areas that should provide guidance for moving forward, whether or not the government sets out a formal strategy.
For example, a panel on Wednesday June 5 will be looking at “Building an Innovation Economy”, exploring the issue from all angles.
Other panels are examining the next generation of wireless, looking at consumer issues (and available recourse for consumer complaints), the evolution of service provider business models and much, much more.
Once again, Canadians find ourselves drifting aimlessly with uncertainty guiding the evolution of Canada’s digital economy. It is a sector filled with activity. Wireless new entrants are in transition; investors are faced with changing rules and a lack of clarity about the transfers of spectrum. Consumers continue to increase their demand for flexible connectivity for voice, data, image and entertainment. Machine to machine communications means more devices talking to each other with significant impact on networks and security.
You need to be at The 2013 Canadian Telecom Summit, just 4 weeks away. Have you registered yet?
Continuing Professional Development: Some of the time spent attending substantive sessions at The 2013 Canadian Telecom Summit can be claimed as “Substantive Hours” towards LSUC’s CPD requirements.
Register today! Download the complete conference brochure here.
 For the third year in a row, Industry Minister Christian Paradis will speak at The Canadian Telecom Summit, getting the final word on June 5. Minister Paradis has delivered addresses at our past two events; we are honoured to have him return to deliver the conference closing remarks this year.
He joins a cadre of 70 industry leaders addressing Canada’s most important gathering of the information and communications technologies industries.
So many important policy developments impact the industry, such as the upcoming spectrum auctions, uncertainty about the future for competitive new entrants and guiding Canada’s place in a global digital economy; for clarity on these points and more, you need to be at The 2013 Canadian Telecom Summit.
Now in its 12th year, The 2013 Canadian Telecom Summit has become Canada’s most important annual ICT event, attracting attendees from around the world. For 3 days, The Canadian Telecom Summit delivers thought provoking presentations from the prime movers of the industry. This is your chance to hear from and talk with them in both a structured atmosphere of frank discussion and high-octane idea exchange and schmooze in a more relaxed social setting of genial conversation.
This year, in addition to our always popular Regulatory Blockbuster panel, we are featuring the following panel sessions:
- CIO/CTO Roundtable;
- Customer Focused Business Transformation;
- Devices, Screens & Apps;
- Network Transformation: Cloud, Security and other trends;
- Business Models in a Converged World;
- The Customers Speak Out;
- The Revolution of TV: Content Anywhere & Anyhow;
- The Next Generation of Wireless; and
- Building an Innovation Economy.
An annual tradition to conclude the first day, after being immersed in a full program of keynotes and panel discussions, we hold our not-to-be-missed Cocktail Reception, sponsored this year by Ericsson. This is a chance to unwind, enjoy some delicious food & drink, catch up with colleagues and make new professional acquaintances.
Come meet with leaders from services and equipment suppliers, applications developers, policy makers, regulators and major customers.
Book your seat early
The 2013 Canadian Telecom Summit: it’s the one conference you need to attend.
Continuing Professional Development
Some of the time spent attending substantive sessions at The 2013 Canadian Telecom Summit can be claimed as “Substantive Hours” towards LSUC’s CPD requirements.
Register today! Download the complete conference brochure  here.
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