Making the switch to Mobile Data

Internet enabled devices are becoming more and more popular in all markets, but not all operators are seeing cellular data usage or revenues rise in line with this growth. Feature phones hide rarely used web technology, and smartphones are often used over WiFi networks only. As competition forces voice and SMS revenues to decline, smart operators are aware that a huge revenue stream is about to open up for them once they convince consumers to embrace mobile data. 

Broadly speaking, there are two consumer issues which slow the rate of data adoption. Consumers are not aware of the value offered by mobile data, and they are price sensitive, or confused by the abstract terms used in pricing. Mobile data consumption does not lend itself easily to straightforward pricing; this is especially true of smartphones that can consume network data without the consumer’s knowledge or consent. Historically, the easiest way to overcome these issues was with all-you-can-eat data plans, but operators who have gone down this route are typically moving back to alternative models in an attempt to protect their network against over-use, and to add flexibility to their customer offerings.

The most successful approaches to increase data adoption will tackle price sensitivity and customer understanding. Some innovative operators have already shown what can be done, often using existing policy and charging infrastructure. They have come up with some innovative ways to encourage consumers to make the leap to mobile data, using their existing investment in policy and charging systems to help define and manage attractive data offers.

Real-time usage caps and notifications – letting the customer control their spend

Most operators already have the facility to implement caps and notifications, but why not make them a part of the offer? Capping the amount of data specific spend on a daily basis, along with a text message notification is the simplest way to give spend control to the consumer. This most basic form of “service pass” should be coupled with a release mechanism to allow the user to increase their allowance in data, time based, or financial terms - more megabytes, more time, or an extra dollar’s worth. Obviously, the committed expenditure will need to increase in line with the additional data.

The key to data caps and notifications is for the measurement to happen in real-time. This gives the customer an understanding of the data impact of their device, which should benefit both parties in the long run. Real-time info will also minimise the need for any customer care interaction. Customers will be blocked off when they hit their pre-arranged/agreed limits, and will have directly agreed to any further spend.

Data related offers –Give consumers what they know

Convincing a customer who has never experienced mobile internet that they will benefit from the service is not always easy. One approach taken by many operators is to offer some well known services for free. Axis in Indonesia offers free text-based Facebook to all of its subscribers. Other operators, such as 8ta in South Africa, do the same with Google services. These free application offers are the perfect starting point for those who are new to mobile data. The customer is likely to be familiar with the service on a PC, and so will appreciate the ability to access live updates from anywhere. But there is more. Facebook in particular is typically packed with links to the broader internet. Once the customer begins to associate the mobile experience to the PC one, they will become more likely to click on these links, especially if you have already implemented an effective cap and notifications system.

Providing flexible pricing tariffs

Pricing tariffs can also be set to encourage data consumption. Many operators already include data components in standard packages, but there is further room for improvement. The packages could be set to include mobile access to certain apps on a tiered basis, where the higher value customers receive further free app access.

Alternatively, factors such as time can be used. For example, 8ta’s night surfer allows large amounts of low price mobile data between the hours of 11pm and 5am. As you can imagine, there is no limit to the number of possible offers once you stop thinking about all internet access as being equal. This level of flexibility in pricing will become a strong competitive differentiator in the future.

Customising offers specific to the individual customer

All customers want to feel that they are getting the best deal for their personal needs. Operators are able to meet this need by understanding the usage profile of their customers. This can be incredibly valuable information as operators can use it to sell app specific access to their customers. Take an example where an operator sees that one in five of their consumers are using WhatsApp, and spending on average 40 cents per day on the associated data. Naturally, usage will also be higher than that average on occasion, and this could contribute to a customer exceeding their allocation. The right offer could help to address this. The operator could send a text message to this group offering unlimited mobile data access to the service for $1 per day. This bolt-on will work for both parties; the consumer will happily pay a premium for the comfort of knowing that they cannot exceed their data allocation and spend with WhatsApp usage. The operator can increase their mobile data revenue, using a service that is typically quite light on network requirements. A number of operators including 3 Hong Kong have recently launched a data service pass on this basis.

This use case can be extended to any app, and can be tailored to the specific data harvested from an operator’s customer base. If executed properly, it can become a key loyalty component for a customer who feels that their network operator understands them, and offers the best deal.

Implementing these controls and offers will maximise the likelihood of customers trying, and continuing to use mobile data. Unlike the all-you-can-eat approach often implemented, and now typically reversed in most markets; this method allows the operator to retain control. Operators can use the rates and offers to manage the number of customers that are using valuable network resources, and associate this to the revenue that these customers generate. This will allow the operator to maintain balance between the rate of revenue growth, and the associated network expenditure, all through existing policy and charging technology.

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