Sprint Leads in data ARPU, Verizon passes Cingular in Subscribers,according to IDC Report

On Tue, 17 Apr 2007 17:02:05 -0600, Todd Allcock
<elecconnec@AmericaOnLine.com> wrote in <f03jn8$qit$3@aioe.org>:

>At 17 Apr 2007 19:10:05 +0000 John Navas wrote:
>
>> The iTunes Store is in fact only marginally profitable (and thus a
>> margin negative), as confirmed by authoritative citations I've posted
>> here.
>
>All of which predated Apple's 2005 Q4 report, IIRC.
>
>Again, I don't disagree with your argument or it's conclusions- just the
>credibility of it's
>outdated "evidence."

Hardly outdated when all available evidence is consistent.

As my late father used to say, "There are none so blind as those that
will not see."

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

On Sun, 15 Apr 2007 07:31:10 -0700, SMS <scharf.steven@geemail.com>
wrote in <4622372c$0$27156$742ec2ed@news.sonic.net>:

>Scott wrote:
>
>> Now Steve. don't be mixing numbers- the number you provide for Verizon
>> is strictly post-paid and the Sprint number is everything.
>
>Nope, all four numbers are postpaid churn. The analysts now insist that
>the carriers provide churn numbers that comply to the same standard.
>Most now provide both total churn (combined wholesale/retail/prepaid)
>and retail churn. ...

There nonetheless differences in how the churn numbers are calculated,
as I've explained in prior posts.

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

On Sun, 15 Apr 2007 14:59:49 -0700, SMS <scharf.steven@geemail.com>
wrote in <4622a055$0$27241$742ec2ed@news.sonic.net>:

>Scott wrote:
>
>> But Navas is right on one thing- the means to caluculate the number is left
>> totally up to the carrier.
>
>No it isn't. The financial analysts have really read the riot act to the
>carriers in terms of reporting of financial results, of which churn is
>always a part.

They've bitched a bit, but without much effect -- there is no rigid
formula that all carriers must use, and there is still considerable
"wiggle room" even when it sounds the same.

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

On Sun, 15 Apr 2007 21:40:59 -0700, SMS <scharf.steven@geemail.com>
wrote in <4622fe5c$0$27204$742ec2ed@news.sonic.net>:

>Scott wrote:
>> SMS <scharf.steven@geemail.com> wrote in
>> news:4622a055$0$27241$742ec2ed@news.sonic.net:
>>
>>> The analysts now insist on clear and unambiguous data. You want to
>>> focus on postpaid retail when comparing churn, ARPU, and net
>>> additions. These are the key indicators of the trends for a carrier.
>>> The churn is calculated based on retail postpaid net additions, no one
>>> is going to risk fudging it due to Sarbanes Oxley.
>>
>> Sorry Steve- unless you point to a standard formula for churn that is
>> required for all carriers to use by a regulatory body (which doesn't exist)
>> I stand my statement as fact
>
>Whatever lights your board. The fact that your statement isn't a fact
>apparently doesn't matter to you.

The fact remains that there is _no_ standard formula in use by all
carriers, and considerable "wiggle room" even when methods sound the
same. Prove me wrong if you can by citing an applicable accounting
standard. Anything less is just an unsubstantiated claim.

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

On Mon, 16 Apr 2007 20:31:53 -0700, SMS <scharf.steven@geemail.com>
wrote in <46243fac$0$27245$742ec2ed@news.sonic.net>:

>Scott wrote:
>
>> Now you are acting like Navas- I asked for facts that would back up your
>> statement and you avoid it like the plague.
>
>You're the one making up stories, like Navas, so it's up to you to
>provide any evidence that contradicts Cingular's own statement that they
>calculate churn in the same way as their industry peers. Don't you be
>pulling a Navas and demanding negative proof!

The one making the claim is you, and you've posted nothing to back it up
other than a vague statement by Cingular. The fact remains that there
is _no_ standard formula in use by all carriers, and considerable
"wiggle room" even when methods sound the same. Prove me wrong if you
can by citing an applicable accounting standard. Anything less is just
another unsubstantiated claim.

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

John Navas <spamfilter1@navasgroup.com> wrote in
news:t3hc23lrhrnci5kpec3n2933053h5b864f@4ax.com:


>
> There nonetheless differences in how the churn numbers are calculated,
> as I've explained in prior posts.
>

Now don't get ahead of yourself, Skippy. While you have argued the point,
you never explained a thing. A quick Google search will indicate that until
just a few days ago, the specifics of churn calculation have not been
discussed, and it wasn't by you. Even if it was- your pedestrian consumer
view would hardly put you in a position to know anything of substance.

SMS <scharf.steven@geemail.com> wrote in
news:46280477$0$27171$742ec2ed@news.sonic.net:

> Scott wrote:
>
>> Actually, three of those mentioned can have a huge impact- no-pay
>> cutomers, fraudulent activations and customers bailing before 30 days
>> can represent a good portion of total deactivations
>
> It doesn't matter because the way the carrier calculates churn is to
> calculate the net additions for the quarter by subtracting the total
> customers at the end of the quarter from the total customers at the
> beginning of the quarter to find the net additions. Then they subtract
> the net additions from the gross additions to find out the number of
> customers that left during the quarter. Then they divide the number of
> customers that left by the the total number of customers to find the
> churn. Cingular explicitly stated that they were going to this model,
> because the other carriers followed it, rather than trying to track
> reseller deactivations.


NO carrier uses that particular formula- they all adjust the net adds for
one reason or another.

>
> A customer that activated during the quarter, but then deactivated
> during the same quarter isn't counted at all. There will be some
> customers that span the quarter, i.e. that activate on March 31st then
> deactivate on April 15th, and they would be counted as a new customer
> during that quarter, but as a lost customer the next quarter. However
> it will all even out as there would be customers that activated during
> the previous quarter that deactivated during the current quarter.

And yet theree is absolutely no proof of this being the case. If you did
your homework, you would know that some carriers do not count deceased
subscribers, some do not count no-pay customers and some don't count
fraudulent activations.


>
> No carrier would put itself at a competitive disadvantage by choosing
> to calculate the churn number in a way that made its churn
> uncompetitive.
>

Churn is nothing but a measurement- it has no direct line to financials.
It is not used in consumer advertising and except for analysts and a few
other geeks, has nothing to do with competitive advantage. Now you are
grasping, Steve.

Todd Allcock wrote:
> At 17 Apr 2007 19:10:05 +0000 John Navas wrote:
>
>> The iTunes Store is in fact only marginally profitable (and thus a
>> margin negative), as confirmed by authoritative citations I've posted
>> here.
>
>
> All of which predated Apple's 2005 Q4 report, IIRC.
>
> Again, I don't disagree with your argument or it's conclusions- just the
> credibility of it's
> outdated "evidence."

The difference is between an "operating profit" and real profit that
takes into account the initial investment. Apple stated that the iTunes
store was profitable, without qualifying the statement with "operating."

They would never fail to make the distinction, as to do so could land
the execs in trouble.

The problem is that Navas doesn't understand that over time a business
unit of a company can change from being unprofitable to being
profitable, as the return on investment increases and the initial
investment is amortized over more unit sales.

Scott wrote:

> Actually, three of those mentioned can have a huge impact- no-pay cutomers,
> fraudulent activations and customers bailing before 30 days can represent a
> good portion of total deactivations

It doesn't matter because the way the carrier calculates churn is to
calculate the net additions for the quarter by subtracting the total
customers at the end of the quarter from the total customers at the
beginning of the quarter to find the net additions. Then they subtract
the net additions from the gross additions to find out the number of
customers that left during the quarter. Then they divide the number of
customers that left by the the total number of customers to find the
churn. Cingular explicitly stated that they were going to this model,
because the other carriers followed it, rather than trying to track
reseller deactivations.

A customer that activated during the quarter, but then deactivated
during the same quarter isn't counted at all. There will be some
customers that span the quarter, i.e. that activate on March 31st then
deactivate on April 15th, and they would be counted as a new customer
during that quarter, but as a lost customer the next quarter. However it
will all even out as there would be customers that activated during the
previous quarter that deactivated during the current quarter.

No carrier would put itself at a competitive disadvantage by choosing to
calculate the churn number in a way that made its churn uncompetitive.

On Thu, 19 Apr 2007 19:58:04 -0700, SMS <scharf.steven@geemail.com>
wrote in <46280209$0$27183$742ec2ed@news.sonic.net>:

>Todd Allcock wrote:
>> At 17 Apr 2007 19:10:05 +0000 John Navas wrote:
>>
>>> The iTunes Store is in fact only marginally profitable (and thus a
>>> margin negative), as confirmed by authoritative citations I've posted
>>> here.
>>
>> All of which predated Apple's 2005 Q4 report, IIRC.
>>
>> Again, I don't disagree with your argument or it's conclusions- just the
>> credibility of it's
>> outdated "evidence."
>
>The difference is between an "operating profit" and real profit that
>takes into account the initial investment. Apple stated that the iTunes
>store was profitable, without qualifying the statement with "operating."

The iTunes store is marginally profitable, which only means it's not
operating at a loss, which makes it a loss leader, since it drags down
margins.

>They would never fail to make the distinction, as to do so could land
>the execs in trouble.
>
>The problem is that Navas doesn't understand that over time a business
>unit of a company can change from being unprofitable to being
>profitable, as the return on investment increases and the initial
>investment is amortized over more unit sales.

The real problem is that you don't understand the economics, and aren't
willing to accept clear statements from Apple.

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

On Thu, 19 Apr 2007 20:08:26 -0700, SMS <scharf.steven@geemail.com>
wrote in <46280477$0$27171$742ec2ed@news.sonic.net>:

>Scott wrote:
>
>> Actually, three of those mentioned can have a huge impact- no-pay cutomers,
>> fraudulent activations and customers bailing before 30 days can represent a
>> good portion of total deactivations
>
>It doesn't matter because the way the carrier calculates churn is to
>calculate the net additions for the quarter by subtracting the total
>customers at the end of the quarter from the total customers at the
>beginning of the quarter to find the net additions. Then they subtract
>the net additions from the gross additions to find out the number of
>customers that left during the quarter. Then they divide the number of
>customers that left by the the total number of customers to find the
>churn. Cingular explicitly stated that they were going to this model,
>because the other carriers followed it, rather than trying to track
>reseller deactivations.

Sorry, but it's not that simple -- there's substantial wiggle room in
how numbers are calculated and adjusted that make them not directly
comparable.

>No carrier would put itself at a competitive disadvantage by choosing to
>calculate the churn number in a way that made its churn uncompetitive.

In fact there can be good reasons to calculate churn differently, as
I've explained before.

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>