Operators' winning packages

Telcos need to offer the best services at the best price to attract new clients
IDC, Nawras, Operators, Umniah, Vodacom, Winning packages, Data

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Customer segmentation is the best solution for operators to tailor their services and to price the offers that their clients will get. Network performance has become the main concern for customers but price is still another factor that motivates customers to jump from one operator to another.

“There are many approaches to segmenting customers, one of the popular approaches is to segment the customers based on their needs. Other ways include demographics and usage patterns and the latter often involves using consumer analytics to segment customers. This is expected to further increase as both the tools and professionals available to execute such analytics are getting increasingly available. Since the customer profile in the region varies significantly, there can be no single ‘winning package’, and telcos must look to offer different varieties of bundles, data plans and packages. These mobile packages that deliver higher value for customers will need to be delivered while keeping cost of delivery and management under control for operators,” said Sony John, analyst at IDC.

By tailoring their offerings to customers, operators are trying to offer the ‘winning package’. They follow customers’ demands to improve their services and their revenue stream. Usage and customers behaviour when using data are two key factors to consider when creating packages.

“Customers who only chat, email and browse shouldn’t have to choose from a portfolio designed around the perception that everyone is streaming huge quantities of video,” said Simon Baldwin, director of Consumer Marketing at Nawras.

Other operators are dividing their customers segments by postpaid, prepaid and Top Up, as Phil Patel, chief commercial officer at Vodacom, commented.

Omar Al Omoush, director of marketing at Umniah believes that operators are competing in the offering based on data volume, but recently subscribers are being more sensitive toward the quality of the connection in terms of its speed and reliability.

“Mobile broadband on handsets offers are becoming a new attraction factor for subscribers to acquire new customers from other operators as well,” he added.

“The significance of mobile data for mobile operators has been increasing over the past few years. This has been driven by the increasing proliferation of smart devices, younger demographics and falling data tariffs in the MEA region. Demand for mobile data is also fuelled by the region's demographics, with a high proportion of young end users who make extensive use of OTT services such as Facebook, YouTube and WhatsApp. Telecom operators are looking to capitalise on this growing demand through various capped and uncapped data plans, partnerships with OTT players and also offering pre-packaged mobile devices and plans which include or subsidise such OTT services. Telecom operators are also successfully bundling newer smart devices with data plans, thus locking in customers, and in many cases converting prepaid customers, who are more likely to churn, to post-paid, higher-ARPU-customers,” said John.

“Much has been said about bringing down prices for those consuming large amounts of voice and data, but our bundle strategy is the key to driving internet penetration for all South Africans. The success of Power Bundles as well as our other bite-size voice services, like Power Hour, has meant that quite literally millions of people are now able to access services that used to be out of reach, Patel said.

According to Patel, by actively reducing data prices and through new initiatives, Vodacom has brought down the average effective price per MB of data by 30% over the past year.

This has resulted in a 70% increase in data traffic on its network, with over 52% of Vodacom’s 32.5 million South African customers now using data.

“For operators, there must be a holistic broadband strategy that is market driven but which brings together key components of the operations. Networks need to become data centric to cope with the shift from voice to data, marketing needs to develop propositions which address the changing requirements of the customer – including having a device portfolio which gets the handsets that will drive data revenues into the base and the front line needs to adapt to be able to manage the expectations of our customers,” said Baldwin.

In their aim to shift their business model from voice to data, operators are looking for more attractive offers on mobile data. However, not all customers in the region are ready for this change.

“Still customers do not have the trust to move totally from voice to data, and this is due to the 3G coverage and network quality. But as long as the network is continuously enhanced; this will enable both communication parties to switch from voice to data,” commented Al Omoush to CommsMEA.

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