Cost per gross addition, or CPGA, is equal to the sum of subscriber acquisition cost and other customer acquisition-related expenses (like advertising, loyalty payments and marketing) divided by the total number of subscribers.
This metric is used in the phone companies, satellite radio, telecommunications and wireless communications industries to quantify the costs associated with acquiring a new customer. A decreasing CPGA could indicate that a company is attracting more customers at the same cost or reducing costs while attracting the same number of customers.
Criticisms
Despite the importance placed on subscriber metrics, determining the formulae by which their values are calculated is difficult. For example, if a family of two signs up for three phones and is sent two bills, but has one billing address, how many subscribers does this amount to? Although vague definitions exist, the exact composition of these metrics remain proprietary to the companies that release them. Even the most common and important term - subscriber - is unclear. None of the web sites, quarterly statements or investor bulletins of the 5 largest U.S. carriers provide definitions for number of subscribers, net additions, ARPU, CPGA or churn. Similarly, organizations such as the CTIA and FCC lack clear-cut definitions or offer only generic definitions, despite using these terms extensively in their own releases and reports.
