Dear Stratton and team:
Yesterday during your earnings call, you made the statement that you are not going to release subscriber numbers any more. It’s a bold move for a company to stop counting subscriber numbers in a fast growing market. We can understand and appreciate the fact that a percentage of your customer base is connected by 2G services, and the churn associated with the sun setting on 2G networks could be confusing to Wall Street. However, we believe this is the wrong message to send.
It’s no secret that most on Wall Street just don’t understand technology. But avoiding the 2G issue by stopping reporting is not the right solution. Every one of your competitors is going to have to go through the same migration challenge with its customer base. The question is not if, but when tier one carriers will chose to turn down their 2G networks and farm that spectrum for new services. Again, the question is not If, but When.
We believe that companies who address this head on, openly, and proactively, should be applauded for their progressiveness and for being first movers.
Any analyst worth his salt can use an average ARPU and revenue to calculate number of subscribers. And analysts will continue to create their own reports estimating individual company numbers. The benefit you receive when you are transparent and self-report is that your numbers are not reported incorrectly. So while the problem isn’t one of what you report, it is one of how you message.
We believe Numerex is one of the strongest companies in the market from a technology, customer base, and historical basis. We urge you to remain market leaders and provide more transparency, not less. Only then will Wall Street and institutional investors see the true value of Numerex.