|
Increasing prepaid retention and usage |
|
|
|
Wednesday, 18 July 2007 |
Prepaid mobile services are now in their 12th year of operation since first being launched in
Europe in 1995. According to research from Informa Telecoms & Media, prepaid mobile services accounted for 61.8% of the global subscriber base at the end of 2006, equivalent to 1.73 billion customers, and attributed to 74% of net additions in the year.
Current operator strategies reflect the significance of the prepaid base. “Prepaid mobile is entering a new realm with an increased focus by operators on customer segmentation and marketing strategies, rather than the traditional prepaid versus postpaid customer approach” comments Michèle Scanlon, author of Global Mobile Prepaid Strategies & Forecasts to 2012, a new report detailing research into prepaid mobile.
“Additionally, prepaid recharge mechanisms are complementing existing contract services for payment of additional airtime beyond the agreed contractual amount or for services beyond the agreed contractual service. These so-called hybrid tariffs are blurring the distinction between prepaid and postpaid customer forcing operators to review segmentation strategies. Operator experience has found that customers fitting a traditional contract profile, are often prepaid by personal choice, even if they could save money by being a contract customer”, continues Scanlon.
In the current prepaid mobile market, the need for prepaid segmentation is driven by a desire to drive usage and revenue from individual users and retain them on the network. Operators are increasingly segmenting prepaid customers by value, needs, behaviour and age. The underlying basis of the segmentation is shifting more towards usage levels rather than how the service is paid for. The form of communication is also shifting to a personalized 1:1 approach which is also reflected in tariff developments with multiple add-on bundles providing ‘personalised’ prepaid tariffs.
Operators are also reconsidering their brand approach leading to multiple brand strategies to maximize market reach to all customers, including prepaid ones in specific communities and niche segments. For example, in Europe, a new branding strategy has emerged with a high value prepaid segment typically associated with the parent brand, and a non-affiliated brand used for a niche segmented approach for low ARPU segment, such as the low cost MVNOs. KPN is a successful example of a multiple brand approach particularly in the competitive German market with a Turkish community brand, Ay Yildiz, a low-cost brand, Simyo, YOUNI, a youth-focused brand, BASE, a brand aimed at frequent contract users, operating alongside its parent brand of E-Plus.
The role of prepaid differs per region with prepaid being a primary driver of growth in emerging markets, and new segment growth in developed markets. Overall, segmentation will increase in importance as prepaid services are expected to account for an increasing proportion of new mobile customer growth, according to Informa Telecoms & Media’s latest forecasts when prepaid mobile customers are predicted to exceed the 3 billion mark in 2012.
www.informatm.com/prepaid |
