Smart Communications, the leading MNO by market share in the Philippines, has selected Canada-based Sandvine, an intelligent broadband solutions provider, to support its mobile internet store, PowerApp, which offers bite-sized, application-specific mobile data plans. PowerApp, developed by Smart’s technology partner, Chikka Philippines, offers email, chat, photo and social packages in 15-minute, 3-hour or per-day increments with unlimited access.
Emerging-market operators such as Smart are increasingly adopting application-specific data pricing as a strategy. It offers a versatile means of tailoring plans according to customers’ usage, allows customers to use apps such as Facebook or YouTube without fear of bill shock and gives them a clear understanding of what they are paying for. Apart from benefiting from an incremental revenue stream, operators can also potentially upsell their customers as data usage grows and continually adapt their offerings to market needs. In emerging markets, where many users may not be able to afford a full-scale data plan, allowing them to access the apps most relevant to their needs not only encourages greater data consumption but puts mobile data within reach of a wider population. It also enables operators to attract users to data at an earlier stage of their mobile-use timeline. The success of this pricing strategy is increasingly evident—one example is Zimbabwean MNO Econet Wireless’ introduction of unlimited Whatsapp bundles, which we reported in the 22 May Tarifica Alert. Another is Facebook’s recent acquisition of Finnish startup Pryte, which enables operators to offer bite-sized data plans; the acquisition is aimed at supporting Facebook’s Internet.org initiative in emerging markets.
However, app-specific data pricing can also be relevant to certain segments of developed markets, such as the youth demographic. Since some users may utilize most of their plan allowances on certain apps only, offering an app-specific data plan may allow operators to better meet the needs of these subscribers. Furthermore, operators could offer app-specific plans or even unlimited data plans with short-term validity to coincide with popular events such as the FIFA World Cup. Operators could also price apps such as YouTube that consume a large amount of data at a different rate from apps such as Twitter that use less data. App-specific pricing also creates the possibility of allowing sponsorship of data for specific apps, which would constitute an additional revenue stream for operators. In the U.S., MVNO FreedomPop has already announced plans to launch app-specific and bite-sized data plans as well as sponsored apps in Q3 2014. These plans, currently in test mode, will be offered alongside FreedomPop’s basic service, which provides users with 500 MB of 4G data per month with no associated monthly fee.
The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues: http://www.tarifica.com/TarificaAlert.aspx