3 Denmark Raises Data Allowances and Roaming Fair Use Without Raising Prices

Mobile operator 3 Denmark said that it is improving certain subscription plans, such as expanding data allowances by 40 percent to 67 percent for its Fri Tale packages, without raising prices. It is also increasing the roaming fair usage policy for customers on its 3LikeHome tariffs from 10 GB to 20 GB.
 
The subscription change went into effect on 27 March for new customers and goes into effect on 16 April—the beginning of a new billing period—for existing subscribers. For customers on legacy 3LikeHome subscriptions, the upgrades do not go into effect until 23 April.
 
The 3 Denmark Plus subscription will now provide 15 hours of talk time instead of 10, and the price remains DKK 80.00 (US $13.30). Fri Tale (unlimited voice) 5 GB subscriptions with 3LikeHome will now supply 40 percent more mobile internet at 7 GB, with the price staying at DKK 130.00 (US $21.65). Fri Tale 10 GB contracts will change to 15 GB ones, at DKK 150.00 (US $25.00). The 20 GB version will now provide 30 GB for DKK 200.00 (US $33.30). The 40 GB Fri Tale subscription will now provide 60 GB, at the unchanged price of DKK 230.00 (US $38.30). The 60 GB Fri Tale service will now provide 100 GB, with the price remaining at DKK 270.00 (US $45.00).
 
As for its mobile broadband subscriptions, 3 Denmark said the 200 GB package will expand to 250 GB for the same price of DKK 250.00 (US $41.65). The 350 GB mobile broadband package will deliver 500 GB at DKK 300.00 (US $50.00).
 
According to Denmark’s Energy Authority, Danish internet use rose by 50 percent in the first half of 2017. This is a very noteworthy statistic, and one that points out the path ahead for mobile operators. With such a dramatic change in usage habits, operators—even in affluent markets such as Denmark—will have difficulty if they plan to continue charging for data at the same rates. Once prices become unaffordable, rather than reducing their usage, customers will be easy prey for competitors willing to undercut on prices. Keeping prices down, as much as possible, as usage expands may cause some pain for an operator in the short run, but it is a sure way to keep customer confidence in the long run.
 
Eventually, 3 Denmark may choose to raise prices to some extent on these plans, but for now, offering more data and higher fair-use limits for roaming data at the old prices will have a positive effect on subscribers and make increases down the road more palatable. In any case, with data demand rising so sharply, it is not likely that increasing prices in strict accordance with consumption will be a good policy for the future.
 
In any case, plan changes like these at 3 Denmark reinforce the idea, which we have frequently referred to, that the best opportunities for operators to increase revenue lie not in traditional services but in new services and functionalities. Among these are IoT applications, mobile money, mobile advertising, and content partnerships.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance.  

To learn more about Tarifica, please visit www.tarifica.com 

Danes Turn Off Mobile Devices When Abroad

Citing a poll conducted by an independent agency, mobile operator 3 Denmark said that 71 percent of Danes switch off their mobile phones when traveling in foreign countries, in order to avoid roaming fees. According to the poll, 28 percent of respondents miss using their mobile phones, and 12 percent miss hearing news from Denmark. Meanwhile, 4.1 percent stated that they do not feel restricted, because they use 3 Denmark's 3LikeHome service (3LikeHome provides voice calls, texts and surfing in 47 countries as if under the domestic service, though there is a 10 GB internet cap.). The operator said that 55 percent of respondents considered that they felt limited by not using their phone abroad, and 17 percent said that not using their phone was the most challenging aspect of foreign travel.
 
With roaming surcharges set to end within the EU in June 2017, the concerns of Danes with regard to travel in most of Europe, at least, will soon be allayed. However, the issue obviously persists with regard to other countries in which Danes may wish to travel for business or pleasure, and we believe that the findings of this survey are quite instructive for mobile operators worldwide.
 
Considering that the reaction of the vast majority of Danish mobile customers to roaming surcharges is simply to turn off their devices, we can surmise that there is a great deal of lost revenue in the Danish mobile marketplace, as well as in the markets in which Danes travel. And considering that Denmark is an affluent country, the situation is likely to be quite a bit worse in other, less wealthy economies.
 
Absent moves from national regulators and regional trans-national entities to reduce or eliminate roaming surcharges (as is the case in some areas outside Europe, such as East Africa), are some things mobile operators can do to pick up some of the revenue that is being left on the table. “Roam-like-home” packages, like 3 Denmark’s 3LikeHome are the most obvious and direct solutions. At least these offer the advantage of a flat fee (which may not be very cheap) paid in advance for the privilege of not being charged by the minute or the megabyte, and at best they can be very affordable, even if offered on a temporary promotional basis.
 
In general, encouraging customers to use their devices when outside their home country is good for operators, and offering discounted roaming will stimulate this use. Keeping roaming ill-affordable helps neither the customer nor the operator. 

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance.

To learn more about Tarifica, please visit www.tarifica.com 

One-Third of Chileans Unaware of How Much Data They Consume

Around 32 percent of Chilean prepaid and postpaid subscribers have no idea how much data they consume every month, according to a report conducted by mobile operator WOM.

The actual usage figures are as follows: 36 percent of postpaid customers use between 2 GB and 5 GB per month, and young people aged 18–24 are the heaviest users. In terms of monthly spend, 26 percent of the 18–24 demographic spend between CLP 20,000.00 (US $30.00) and CLP 30,000.00 (US $45.00) per month on data, and 18 percent of them spend more than CLP 30,000.00. Around 44 percent of the data use in this age range is for streaming services such as Netflix or YouTube.

Findings such as this one from Chile are, we think, very instructive for mobile operators designing plans. We often assume that customers and potential customers make rational decisions about their purchase of services, weighing their consumption habits against various pricing options. However, in many cases they are doing nothing of the sort, since they actually do not know how much data they consume, or how that data is apportioned.

While consumer ignorance could work to the MNOs’ advantage under certain circumstances—for example, by causing some users to pay for more data than they really need—in general we believe that it is in operators’ interest for customers to be well informed about their usage. With operators taking pains to craft packages with multiple options and price levels aimed at various user profiles, subscribers need to have accurate knowledge about their use of data (as well as voice minutes and SMS, for that matter) in order to make good decisions about which plans are right for them.

Therefore, operators need to take action. First, they should be conducting customer surveys to assess the level of awareness about service consumption. Then, if they identify a problem—as in Chile and in many other markets—they should implement new practices to remedy the situation.

One possible solution is simply clearer and more transparent billing to make it obvious to subscribers exactly what their consumption was in a given period and how much they paid per service. Beyond that, operators could set up procedures so that users are regularly informed about their usage levels, via text message or otherwise through their devices, at regular intervals and not just when top-ups are about to run out. Another approach is a voluntary subscription check; the operator 3 Denmark is currently offering this option, which it decided to do after an independent survey found that 54 percent of Danes did not know their mobile consumption levels. Of the customers who have agreed to the check, about 25 percent have actually changed their mobile plans.

We believe that an informed customer really is the best customer, and any campaign to raise awareness levels about usage would be a win-win proposition. Otherwise, many of the intricacies of plan design could end up being wasted effort. 

 

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance.

To learn more about Tarifica, please visit www.tarifica.com