Wednesday, October 1, 2014

Promotions are the Critical Driver of Consumer Value for Australian Mobile Phone Plans

Tarifica  has announced the latest Tarifica Scores for postpaid mobile plans in Australia. The Tarifica Score™ is an advanced algorithm used to evaluate mobile plans based on the value they offer consumers.  It incorporates every aspect of each mobile plan (including usage allotments, geographic coverage, data speeds, value added features and promotional elements) and weighs them against each plan’s total costs to determine its consumer value. 

Based on the postpaid plans offered in September by operators Telstra, Vodafone, Optus and Virgin Mobile, Optus’ “My Plan Plus $60” continued to be rated highest in the ‘without phone’ segment while Vodafone’s “Red $80 Plan” still ran second.  Virgin Mobile’s $100 Plan displaced Vodafone’s “$100 Red Plan” as highest in the ‘with phone’ segment.

“The largest changes we saw in scores were driven by the addition or expiration of promotions,” said Sergey Fisun, Tarifica’s Australia Analyst.  “For example, Virgin Mobile’s best ‘with phone’ plan in June ($90/month) received a score of just 48 but its replacement plan ($100/month) led the market in September with a score of 100, displacing Vodafone.  The difference was due to the addition of 2 gigabytes of data per month plus a promotional bonus of another 1 gigabyte each month.  In short, Virgin’s slight increase in price was more than offset by its enhanced data offerings.”

In contrast, Vodafone ended its double data promotion and saw its highest scoring ‘without phone’ plan drop by 10 points while its best ‘with phone’ plan fell from the top spot in that category to second place with a score of 94.  In general, Vodafone’s lower priced ‘with phone’ plans now come with two months of unlimited data, which helped to lift their scores.  Its higher priced Red series, however, which switched promotions from double data for a year to unlimited data for two months, saw their scores decline.

Although Telstra’s plans still suffer from high costs relative to the volume of voice, SMS and data offered, many of its scores improved due to changes in its data promotion from a one time (one month) offer of an additional 25GB (which was considered by the Tarifica Score algorithm at much less than full volume due to its impracticality for most users) to an additional 500MB per month which is obviously of more value.  Telstra’s Mobil Accelerate XL plan improved from a score of 35 to 48 as a result of this change.

“In today’s mobile marketplace, consumers are flooded with hundreds of plan variations and constantly shifting promotions and deals—the majority of which come with different costs and services and access networks of differing strengths. When making a decision that will likely impact them for up to two years, consumers can use Tarifica Scores to cut through the clutter and identify those plans in every market segment that offer the best value for the money.  They can also see how plan values are affected by even small changes in promotional offers,” stated Tarifica Program Manager, Will Watts.

Ken Dolsky, Senior Program Director at Tarifica also commented on the market intelligence value to operators.  “We also see great interest in the Tarifica Score among mobile operators.  Tarifica provides access to its proprietary model which enables operators to design plans that score high in consumer-friendliness and value.  They are also able to quickly see, in quantitative terms, the impact that competitive changes have on the market.  While all the operators in a region may know that operator X has high prices and relatively slow speeds, the impact of improvements in such factors will be immediately apparent and responses can be formulated quickly.”

To Contact Tarifica's Research Team:

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