I've been following forecasts of mobile phone adoption since the mid-1990s and there is one thing that's completely consistent – future subscriber growth is always underestimated. This is true across every analyst, every firm and every agency I've encountered.
Usually the underestimation takes 2-3 years to become obvious, but here's a graph from Wireless Intelligence (a joint venture of Ovum and the GSMA) which appears in a report Deloitte did for the GSMA entitled SIM Activation Tax and Mobile Telecommunications in Pakistan, which I got from Babar Bhatti (Thank you Babar!).
When I saw this I was immediately suspicious. Why does the green dotted line slack off. If anything the rate of mobile adoption in Pakistan has been accelerating. So I took a quick check of the "Telecom Indicators" on the Pakistan Telecommunication Authority website. The figures from Wireless Intelligence and from the PTA agree up through June 2006, but at that point Wireless Intelligence begins under estimating.
The Wireless Intelligence estimate for 2Q07 appears to be 32 or 33. The actual figures for 2Q07 were 39.94. The Wireless Intelligence estimate for 4Q07 is 37 or 38, but the actual figures for August 31, 2007 were already 42.65.
Why the consistent under estimates?
I don't have a answer but I have an idea, based on 4 or 5 discussions spread over the past decade. Most people (including noted industry analysts) haven't really grokked Moore's law outside of PC speeds. Or more generally, they don't get the power of new ideas and new methods to improve price/performance across the board.
In the specific case of Pakistan, I've heard at least two people (not from Wireless Intelligence) say that mobile phone adoption will slow down as, even with today's low rates, the poorest people will never be able to afford mobile phones. What this misses is, every year the low end mobile phone costs less, and every year the cost per subscriber for new mobile infrastructure goes down. Pakistan is a highly competitive mobile market. When costs go down, subscribers see the benefit fairly rapidly.
Moore's law is rather specific. The economist Paul Romer describes the more general concept:
Every generation has perceived the limits to growth that finite resources and undesirable side effects would pose if no new recipes or ideas were discovered. And every generation has underestimated the potential for finding new recipes and ideas. We consistently fail to grasp how many ideas remain to be discovered. Possibilities do not add up. They multiply.
Globally, it took 20 years to sign up the first billion mobile accounts, less than four years for the second billion and only two years for the third billion. Yes, these are SIM cards not necessarily unique people but, on the other side of the coin, the world's poorest start by sharing a mobile phone. That gets them on the bandwagon, helps them economically while improving their standard of living. So there is another side to the coin as well, mobile phone driven economic growth also helps increase the number of people who can afford the ever less expensive mobile phones.