To understand oversubscription a little further, it helps to take a quick look back at history when landlines dominated the market. Yes, Ma Bell was successful in putting a phone in everyone’s home and office, but if everyone was to pick up a phone at the same time, the system would crash. Of course, this was the norm because telcos oversubscribed the system knowing that not everyone would be on the phone simultaneously. As recently as 1990, landline oversubscription was only three to one.
In 2016 the oversubscription ratio was 15:1. And today it is at 25:1, which is a 66% growth over three years, or a 19% compound annual growth rate (CAGR). This means that for every active call there are 24 other people who pay but are not making a phone call. In 2020, it increased 19% more when the oversubscription ratio became 30:1. Illustrated by the graph, with NetSapiens’ PBX platform‘s sessions based pricing model, our customers can sell up to 19% more customers every year – achieving higher and higher margins than seats based pricing models.