Survey data collected from US customers in the past year reveals how the growth potential of global wireless markets is being seriously underestimated. Aside from the US, markets with a high percentage of prepaid services also contribute to this misjudgment.


The term that has caused the most confusion is “wireless penetration,” which was intended to mean the percent of the population that used (was penetrated) by wireless phones. An example of this deep confusion was found in one research firm’s declaration that “one third of the world’s population now has a cellular phone.” That conclusion was based on dividing the number of phone lines by the world’s population. Since there are three times as many people as there are mobile phones, obviously one-third of the people have mobile phones. The math behind the assumption was elegant, simple and wrong.

During the past year, In-Stat has asked thousands of wireless subscribers in the US and Canada if they have more than one mobile phone number. Fifteen to over 17 percent responded that they did, indeed, use more than one mobile phone; most had one for personal use and one for business; many use a standard cell phone for most voice calls and have a second device—usually a Blackberry—as their second phone.

Here is the effect of these multi-line subscribers: at the end of August 2006, the Cellular Telephony and Internet Association (CTIA) stated there were 218.4 million wireless subscribers in the US. The CIA Factbook on-line states that the US population at the time was approximately 298.4 million people. The simple math (lines divided by people) finds 73.2 percent “penetration” in the US. The incorrect conclusion is that nearly three-quarters of the people in the US have mobile phones.

However, using data from In-Stat surveys that suggests that about 15 percent of those users have two cell phone subscriptions (or more) changes that figure substantially.

• 218.4 million total subscribers

• 15 percent dual ownership

• 32.7 million users with two phones

That means there are 32.7 million fewer people in the US who have cell phones than the so-called “penetration rate” suggests. True penetration is closer to 60 percent and there are over 30 million potential new wireless subscribers that have not been recognized in the past. Outside the US, the over counting is even greater. Because many users, especially those using prepaid wireless services, purchase multiple SIM cards from different carriers, “penetration rates” exceed 100 percent in several countries. Tiny Luxembourg takes the prize with over 1.3 wireless phone lines per resident or 130 percent “penetration.”

Without an accurate count of the number of subscribers using multiple devices, it is impossible to accurately estimate the number of people who still do not have mobile phones. The highly desirable “total addressable market” is larger—perhaps much larger—than it appears.

During 2006 and into the future, In-Stat is expanding a broad range of consumer surveys to include more respondents in Europe, Asia and elsewhere. These data will be used throughout In-Stat in developing accurate estimates of wireless users worldwide and will provide even more accurate forecasts of wireless subscribers, handsets and infrastructure as well as applications such as mobile video and multimedia those subscribers will use.