Introduction
Recently, there has been considerable discussion in the media about a seemingly simple yet complex topic: how mobile lines are counted for telecommunications services. While governments boast about high cellular penetration rates, the stark reality reveals that in Latin America, between 15% and 30% of people lack cellular service.
Statistical Discrepancies
In Mexico, the Federal Institute of Telecommunications (IFT) reported a 112% mobile penetration rate for 2024. However, the National Survey on Availability and Use of Information and Communication Technologies in Households (ENDUTIH) by the National Institute of Statistics and Geography (INEGI) showed only 81.7% of Mexicans used cellular services for the same year.
This statistical dichotomy has multiple explanations, including regulatory gaps, operator disconnection practices, and technological advancements.
The Role of eSIM Technology
eSIM, or embedded SIM, offers convenience and flexibility to mobile users but significantly contributes to the overestimation of active mobile lines, particularly in prepaid-heavy markets like Mexico’s.
Unlike traditional physical SIM cards, eSIMs are built into devices and activated digitally. This flexibility allows users to switch between multiple profiles without changing hardware, but it introduces challenges in accurately measuring subscriber activity. For instance, a single device can store multiple eSIM profiles from different operators, but users typically use only one at a time.
The issue is exacerbated by the ease of activating eSIMs, often through a QR code or app tap. As a result, many profiles are activated but rarely used, yet they remain active within the operator’s system. Unlike physical SIM cards that are often discarded when no longer needed, eSIM profiles can persist in a device or operator’s provisioning systems without formal disconnection.
This leads to an accumulation of technically active but functionally inactive lines. Furthermore, since disconnection—the process of identifying and removing inactive lines—typically relies on usage inactivity (e.g., no calls, texts, or data for 60 or 90 days), eSIMs make detecting disconnection difficult. Operators often delay deactivating unused profiles, allowing them to maintain higher subscriber numbers.
The Impact of Number Portability
The impact of eSIMs is magnified when combined with mobile number portability (PNM). PNM inflates the reported number of mobile lines by allowing multiple technical representations of a single user or number.
PNM enables users to switch operators easily, often digitally and instantaneously. After porting a number to a new operator, the old operator may delay deactivating or lowering the profile, especially in prepaid systems with less stringent user contracts and identity verification.
This can result in both old and new operators simultaneously reporting the same number as active. In markets with weak regulatory oversight and lax subscriber database reconciliation, operators can maintain unused or ported eSIM profiles in their systems for extended periods. This lack of synchronization and accountability leads to ghost users and artificially inflated subscriber figures.
As a result, mobile penetration rates and subscriber-based performance metrics may be distorted, providing a misleading picture of the market’s actual activity.
Latin American Challenges
In Latin America, including Mexico, these issues are particularly pronounced due to structural market factors. The region has a high prevalence of prepaid plans, typically between 70% and 80% of total mobile lines, naturally leading to higher turnover and volatility.
Users frequently switch providers, let SIM cards expire without formal cancellation, and possess multiple SIM or eSIM profiles to take advantage of promotions or address coverage limitations. Moreover, changing providers without switching devices is increasingly common, as per Counterpoint Research figures.
When discussing active mobile lines, it usually refers to a single line used regularly. However, other registered and counted as active lines may exist, skewing data. Inconsistent definitions of “active” among operators also contribute to this issue.
While each company’s method for determining an active mobile line may seem minor, imposing traffic receipt and generation conditions differs from assigning minimum recharge amounts. This is especially true in a spam-growing SMS environment, where an unsolicited SMS could classify a cellular line as active due to incoming traffic.
Typically, the inactivity period for canceling a line is 30, 60, or 90 days. Although many operators may overlook this rule, resulting in many “canceled” lines remaining active, using longer windows or delaying deactivation allows operators to report larger user bases, even if real traffic has ceased.
This distortion affects various metrics, including average revenue per user (ARPU), mobile penetration rates, and operator valuations. In prepaid markets with narrow margins, inflated subscriber numbers can also undermine policy decisions and service universal planning.
An interesting phenomenon in Latin America is how a single operator’s mobile traffic remains relatively unchanged or even decreases while its active line base grows monthly.
Other factors contributing to overcounting lines include people moving to new locations and choosing different operators, going abroad (where prepaid simply stops recharging), or experiencing life events like death, imprisonment, or illness that prevent cellular service use.
Academic studies have found that prepaid rotation can extend up to 12 months after last activity, further demonstrating how inactive lines can persist in operators’ systems beyond real-life usage.
This is why industry estimates suggest that between 20% and 35% of reported prepaid lines in Latin America, including Mexico, are inactive or marginally active. In other words, in Latin America, if we consider 70% of the mobile base as prepaid out of approximately 896 million existing cellular lines (according to GSMA Intelligence), around 627 million would be prepaid, with between 125 million and 188 million of those counted as active not actually being so. In Mexico, The Competitive Intelligence Unit reports 155 million active mobile lines, with 129 million being prepaid. Using regional averages, between 25 million and 39 million lines counted as active do not exist in the market.
Clearly, events that inflate an operator’s line count are not limited to one or two market players. The impact is universal, making it unlikely for one operator to have a 2% to 5% overcount while competitors have 30%, unless, as seen in the Caribbean, an operator has a policy of never disconnecting lines.
Regulatory oversight is weak or inconsistent throughout the region. The absence of a standardized methodology for counting Active Monthly Users (MAU) and harmonized definitions suggest that subscriber numbers are likely inflated.
Over 20 years ago, during a project on mobile line counting, my recommendation was to emulate Argentina’s prepaid approach for contract lines: charge operators. I recall telling the government that charging a dollar per actively declared line, regardless of prepaid or postpaid status, would result in significant mobile base purging within three months. The concern, according to the client at the time, was that doing so would make the government look bad by reducing mobile users in the country by a quarter.
Let truth not kill the illusion of a good narrative.
