Digifone removes 100,000 `inactive' accounts

Irish mobile phone firms Digifone and Eircell may have seriously over-estimated their customer base, it emerged yesterday.

New figures for Digifone released by its parent firm, BT Wireless, show it has removed more than 100,000 "inactive" customers from its books this year.

This accounts for more than 10 per cent of Digifone's active customer base, which the company reported as 997,000 users in the period to June 30th, 2001.

Likewise, Eircell has confirmed to the The Irish Times that it removed some 65,000 "inactive" users from its prepay user base on March 31st, 2001. Both firms are trying to eliminate the double counting of prepay users who tend to switch to other networks more frequently than contract mobile users.

BT Wireless yesterday introduced a procedure which removes pre-pay customers from its books if they do not make a call within a three month period. The company previously applied a limit of six months.

A Digifone spokesman said the firm had introduced the six month "inactive" user policy in March and was now moving to strike off these users after three months in line with BT's policy. He said this would eliminate the possibility of including customers who had moved to other networks or simply bought new handsets.

Eircell said it had introduced this type of rolling elimination of inactive users more than two years ago.

"We are continuously doing this every few months," said a spokeswoman. "On March 31st, 2001 we removed about 65,000 inactive customers."

Vodafone recently introduced a three-month cut-off for its definition of active users while Orange said yesterday it had only ever reported active customers. It said these were defined as those who had made a call or received more than three calls over three months.

But analysts said the new figures could significantly affect the official mobile penetration figure for the Republic which stands at 73 per cent.

Ms Jemma Houlihan, technology analyst with ABN Amro, said the true mobile penetration rate was probably around 64 per cent.

"There was a lot of duplication in older customer figures," she said. "If penetration is closer to 60 per cent than 70 this would help the new entrant, Meteor."

But she said the double counting of customers would not have any major repercussions for the industry. "The average revenue per user figures have been covered all along and are a much better representation of the industry," she added.

Telecoms regulator Ms Etain Doyle, however, recently wrote to Irish mobile phone companies to find out when they consider a user inactive. In her next quarterly review, she is expected to publish new mobile penetration figures which take account of inactive users.

The figures released by Digifone show the firm attracted 24,000 new customers in the quarter to June 30th, 2001, an increase of 2.5 per cent. This was the lowest percentage increase of all BT Wireless operations which averaged out at 3.1 per cent growth.

But BT actually reduced the size of its customer base in line with its policy to eliminate inactive users. The firm said its active users fell to 16.1 million, down from 16.9 million in March.

Although detailed figures for Eircell were not included in a Vodafone trading statement last week, an Eircell spokeswoman said the firm had added about 35,000 customers in the same period.

Slower growth rates for both firms in the past quarter reflect a general pattern in the European mobile industry as penetration rates reach saturation point.