MTN South Africa Introduces “Smart” Feature Phone

MTN South Africa has launched the MTN Smart S device, a new feature phone manufactured by U.S.-based KaiOS Technologies. Priced at ZAR 249.00 (US $17.47), the phone supports popular apps such as WhatsApp, Facebook, YouTube, Google Maps and Google Assistant. It also has a web browser and is 3G-enabled. MTN is bundling Smart S with an allocation of 100 MB of data valid for 30 days for the first six months and 1 GB of WhatsApp bundles valid for 20 days for the first six months.

The device follows the recent launch of MTN Chat, which enables customers to top up airtime and data bundles via WhatsApp. MTN Smart S is available at selected MTN retail stores and major retail partners.

The Smart S device is a “smart feature phone,” a hybrid or intermediate device category that has appeal in developing and budget-oriented market sectors. Running on KaiOS, an open-source, Linux-based operating system, it is a white-label feature phone that is capable of accessing certain apps that require data, such as WhatsApp, Facebook and YouTube. The KaiOS company’s technology, which is also found in phones branded by Nokia and Alcatel, enables simple lightweight flip phones to perform tasks previously available only to smartphones, and at a very low price point. KaiOS is also behind the JioPhone, a similar white label device that is offered by Indian operator Reliance Jio.

By producing the Smart S device and self-branding it, MTN is making a savvy move. The device has the potential to bring the use of universally popular apps to a huge customer base that previously lacked access altogether. Furthermore, since such users are likely only familiar with feature phones, aside from the price issue, the Smart S will make it easier for them to make the transition to using data.

Ultimately, that is very likely to lead them to want fuller use of mobile data, with more better interface. That means that many Smart S users will eventually upgrade to true smartphones that cost more and use far more data, thus driving more revenue to the operator. In the meantime, by making this smart feature phone available, MTN will likely attract many new customers, sell more data and lay the groundwork for future profits by cultivating these new data consumers.

Tarifica’s products and services are powered by large-scale data from the global telecom industry and a deep level of expertise gained from our singular focus. We leverage these core attributes to help our clients understand their markets and answer their most challenging questions. Our team of analysts, software engineers and data scientists deliver real-time dynamic solutions for the telecom industry. Our software and state of the art data extraction techniques enable our clients to make smart decisions in real-time based on insightful, actionable data.

We are the telecom plan & pricing experts.

 If you have any questions about this article, feel free to contact our Editor-in-chief John Dorfman at jdorfman@tarifica.com

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

FreedomPop Spain to Deactivate Its 3G Service

MVNO FreedomPop Spain has informed its customers that anyone who has not yet acquired a new SIM card, at a cost of €4.99 (US $5.96), to migrate to its new 4G/LTE service will be disconnected from its existing 3G service on 1 September. FreedomPop’s decision comes after it partnered with Spanish telecom group MásMóvil to offer its customers 4G services over the network of Yoigo, MásMóvil’s MNO brand. Users have the choice to port their numbers over to the new 4G platform via the new SIM, or to any other operator’s network.

FreedomPop, a U.S.-based MVNO, launched service in Spain a year ago, offering—for the first time in Spain—a free-of-charge plan that included 100 minutes of calls per month, 300 SMS, 200 MB of data and unlimited access to WhatsApp. The new basic plan is still free, but it no longer comes with data-free WhatsApp use or international roaming. The offerings of the company’s four other so-called premium plans start from 1.5 GB of data, 500 SMS and 200 minutes of calls for €4.99 (US $5.96) per month and range up to 10 GB of data and unlimited calls and SMS for €28.99 (US $34.63) per month.


This move on FreedomPop’s part represents a maturation process in Spain, a developed yet relatively budget-conscious European market that has seen an upsurge in MVNO entries. FreedomPop’s move to Spain in 2016 evidently came at an opportune time, and the MVNO itself has matured to the point where it was appropriate to make the transition to 4G/LTE.

The high-speed service is now the worldwide standard wherever mobile data is needed, and for even an aggressively budget-oriented MVNO to end 3G is a strong indication that the legacy service’s days are numbered in developed economies. And with the rise in popularity—and necessity—of data-hungry apps and services, customers have greater incentive than ever before to migrate to 4G.

So in doing a deal with Yoigo to get access to a 4G network, FreedomPop is offering higher quality while remaining true to its roots as a disruptive force in the marketplace by still offering free service. However, the difference now is that with the free basic plan, unlimited WhatsApp and international roaming are withdrawn, which leaves the customer who uses these services with the choice of either reducing data use or moving up to a paid plan. This is generally the end game with offerings of free services in any case, with operators hoping that customers who have become accustomed to using a certain level of services at low or no cost will become habituated to doing so and then after a while will be willing to pay for them. In addition, FreedomPop is making the reasonable assumption that its slate of non-free offerings with much larger amounts of data will be palatable to Spanish prepaid consumers at least in part because of the fact that they are being delivered over 4G/LTE. 

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 

Jongla Pitches Its Instant Message Service to Africa

Finland-based OTT messaging service provider Jongla is targeting the African market with a campaign stressing that people there can save money and reduce their data requirements by switching from WhatsApp and other OTT apps. Jongla has been specifically developed for people living and working in Africa and other emerging markets in which data costs are high and coverage is unreliable. Jongla says it is the most data-light instant-messaging app in the world, taking only 3.4 MB to download on Android phones compared to WhatsApp (23.7 MB), Facebook’s Messenger (30.2 MB); most other messaging apps take up at least 20 MB. Furthermore, once downloaded, Jongla uses just 10 percent of a handset’s memory, meaning that users do not have to uninstall any apps to make space for Jongla. The app’s unique data compression techniques ensure that it does not consume as much mobile data as other messaging apps for essential background processes. Jongla is platform-independent and works over low-speed Wi-Fi networks as well as 4G, 3G, EDGE and GPRS.  Here is yet another OTT challenge thrown down before the world’s mobile operators. This time, an enterprising developer has found ways to make its app especially easy and cost-effective to use, particularly in markets where the majority of smartphone customers have budget devices and where cellular coverage is not the best. Mobile operators in emerging economies, where cost is a paramount concern, already have a hard time competing with OTT providers when it comes to messaging. With apps like Jongla coming on the market, they will likely have to work even harder to come up with distinctive and appealing offers—for device deals as well as services—in order to keep subscribers messaging over their cellular networks.

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

Be-Bound Offers Web Access Without Data Service

French startup Be-Bound says it has found a way to allow smartphone owners to continue using their internet and connected apps where there is no 3G or 4G/LTE coverage. The company states that it offers “the first solution that allows users to stay connected anywhere there is a working phone signal. We use the SMS network as an alternative transport layer to bring users a true app experience when there is no internet network and reach even the most remote regions.” Be-Bound has developed a patented compression algorithm to reduce the data traffic generated by its apps. “Even when our e-mail app is working with 3G/4G, users consume up to 5 times less data than when using standard e-mail,” the company’s website states, adding that the start-up is opening its technology to mobile app and IoT developers who want to reach wider populations.    Solutions to allow internet access to non-3G/4G users and even to feature-phone users are nothing particularly new. Be-Bound’s technology, however, promises a rich experience akin to true smartphone high-speed data. While other solutions have been marketed mainly to customers in developing markets who do not yet have smartphones and data plans but still wish to connect to Facebook and surf the web—with the hope of encouraging them to eventually adopt data use—Be-Bound’s system seems targeted to smartphone and data users who experience spotty access to high-speed signals, a problem that occurs in many areas, developed and developing alike. Whether or not its technology delivers these impressive results, of course, remains to be seen, but the promised increase in data efficiency, if fulfilled, could resound beyond the current specific application.

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

Beeline to Stop Developing 3G Network

Russian mobile operator Vimpelcom, working under the Beeline brand, plans to stop investing in the development of its 3G network, according to a report that cited Alexander Popovsky, vice-president for corporate strategy and business development. The investment in 3G is now being reduced and will cease entirely during 2016. No new new 3G networks will be deployed, while the operator focuses on its 4G/LTE rollout. Popovsky said the decision was made in response to the explosive growth in LTE services and with the expectation that most smartphones that will be on the market next year will support LTE. As in most markets now, 4G/LTE is coming to be a standard expectation in Russia, and the need to deploy it as soon as possible dictates that all available development resources be allocated for it. At this point, 3G is rapidly becoming a legacy service, one to be supported but not extended or enhanced. For operators, remaining competitive requires a single-minded commitment to 4G, and Vimpelcom’s approach of rapidly reducing 3G investment is emblematic of its intention to fully meet the demands of the marketplace.

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

Telenor Norway to End 3G Service Ahead of 2G Service

In a recent statement, Bjørn Amundsen, Telenor Norway’s director of coverage, said that within five years the operator’s 4G/LTE network will match its 2G network in terms of coverage. Telenor Norway has already deployed 4G/LTE service in 42 of 87 municipalities in the country’s key northern territories and is on target to cover all municipalities in northern Norway by the end of 2016. Currently, subscribers can only access data on Telenor’s 4G/LTE network, but the operator plans to launch VoLTE before the end of the year. Amundsen also said that the MNO will phase out its 2G network within a decade and will end 3G service sooner than that. It will maintain its 2G network longer than its 3G network due to device compatibility issues and the growing number of M2M services.

Telenor Norway’s prediction that it will end 3G service ahead of 2G service comes as no surprise, as we have seen other operators, such as those in the U.K., state the same thing. In New York, U.S. mobile operator Verizon Wireless has shut off 20 MHz of spectrum that was once allocated for 3G service and is running 4G in its place. The operator is doing the same on its network in Cleveland, OH. Lastly, as we have previously reported, in India, where adoption of 3G networks has been slow, some operators may go directly to 4G from 2G networks, bypassing 3G service altogether. Requiring operators to maintain three networks is very expensive, so it is critical that they choose how to repurpose spectrum based on return of their investment. For most operators, 2G networks are still an important source of revenue, particularly in rural areas, where the return on investment for 4G infrastructure upgrades will not be enough to make it very profitable. In addition, 2G service uses a low frequency, which results in reduced operating costs for MNOs. On the other hand, 3G competes more closely with 4G in that it is data-focused, and with 4G service, operators may be able to upsell users to larger data packages due to the faster speeds it offers. As Telenor Norway begins to refarm its spectrum, 3G service may well be the first to go, mainly to ensure that there will not be any loss of coverage in hard-to-serve areas and to ensure that users with older handsets still receive service. Once its 4G/LTE network can support VoLTE across the country and more users have 4G-enabled smartphones, we may still not see the total elimination of 2G service, because 2G is particularly useful for M2M connectivity, which is in growing demand.

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. Contact Tarifica for a subscription to the Tarifica Alert. 
Tarifica is the 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. Click here to contact a Tarifica Analyst.

UK Regulator Issues Report on Speed and Coverage

Ofcom, the U.K.’s telecom regulator, has issued a new report on the state of mobile broadband. It is based on the results of roughly 210,000 tests from five major cities—Birmingham, Edinburgh, Glasgow, London and Manchester. The study included the U.K.’s four largest MNOs—EE, O2, Three and Vodafone—and ranked them on the following metrics: average download and upload speeds (see graphs below), average time to load a web page and average latency (all of these for 3G and 4G). Also included in a separate section of the report were assessments of each operator’s current 3G and 4G coverage for June 2014 and October 2014. While the results were mixed across the multiple statistics, the strongest performer was EE, which posted the fastest 3G and 4G download speeds, fastest 4G upload speed and highest coverage percentages. With regard to the study, Ofcom Chief Executive Ed Richards stated, “Improving mobile quality of service is an important area of Ofcom’s work. Our research both incentivizes mobile providers to offer a higher quality of service while helping consumers choose a mobile package that best suits their needs.”

Unsurprisingly, the operators that did not perform particularly well have already issued statements calling the study’s results into question. While we appreciate that other operators might have performed better if a different set of cities had been chosen or if more rural areas had been included, we believe the data collection techniques and metrics used in the Ofcom study are statistically sound and that its results provide a relatively comprehensive picture of mobile broadband service in the U.K.

We applaud Ofcom for undertaking this type of serious study and publishing the results in a format accessible to laymen and believe that this represents a strong example of regulatory best practices. We have often criticized regulators for being overly involved in dictating mobile prices and service/coverage thresholds. While these goals are admirable, these kinds of top-down regulation are too often heavy-handed, inflexible and counterproductive. This newest Ofcom study represents a smart step in the other direction. The greatest challenge for consumers in the mobile ecosystem is the abstractness of the product—such things as download speed, network latency and 4G coverage are not intuitively obvious to many—and it is in the interest of each operator to advertise only the metrics in which its network performs best.

Most consumers are capable of weighing the benefits of increased coverage or speeds against greater monthly costs or reduced allotments, but what stops them is the fact that available information is often limited, contradictory or derived from suspect sources. By conducting a thorough survey and publishing the results, Ofcom is creating an environment in which each operator has every incentive to improve its network’s performance, since they know that its progress will be tracked and reported on by an independent actor. We believe that this program will help the U.K. increase its mobile broadband speed and coverage much faster and at much lower cost than the traditional top-down approaches. 

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 or to speak with the research team: http://www.tarifica.com/contactus.aspx

Vodafone Will Spend US $1 Billion in India

British multinational Vodafone plans to invest nearly US $1 billion to develop its operations in India. Investments will mainly focus on upgrading the operator’s network and retail stores across India. According to Vodafone India CEO Marten Pieters, the company plans within the next two years to upgrade its network and expand 3G coverage to every service area in the country, doubling its current coverage. In addition, it intends to conduct 4G/LTE service tests in 2015. Vodafone now has 169 million customers in India, making it the second-largest operator by subscriber base, after Airtel. In 2013, Vodafone India’s revenues amounted to INR 376 billion (US $6.1 billion). Its ARPU is INR 203 (US $3.29) per month. This past February, Vodafone sold its 45 percent stake in U.S. operator Verizon Wireless for US $130 billion, reducing its own value by half to ready itself for an ambitious expansion plan outside its core markets in Europe. It is using cash from that transaction to fund its investment in India, which Pieters characterized as the fastest-growing smartphone market in the world. While Indian customers currently spend a minuscule amount of money per month on mobile services compared to customers in Europe or the U.S., they are poised to dramatically increase their levels of spending, while in the highly-developed markets, ARPU is heading steadily downward. India is expected to eventually surpass the saturated U.K. as Vodafone’s largest source of revenue. Vodafone’s expansion of 3G and eventually 4G is intended to drive data consumption, and it will very likely have that effect. One reason, beyond the general worldwide trend toward ever-greater data hunger, is that as a large and mostly rural nation, India is ripe for the development of online and especially mobile-based commerce. Challenges facing Vodafone India in the months ahead include qualifying for enough spectrum in forthcoming auctions and funding the necessary upgrades in the face of low revenue. India may be the future, but ushering that future in will be far from easy, even for a giant like Vodafone.

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  Story Of The Week

Verizon CEO Defends Throttling of LTE in Congested Areas

Daniel Mead, the CEO of number-one U.S. operator Verizon Wireless, is defending his company’s plan to extend its “network optimization” policy—which slows down heavy 3G users at cell sites during periods of high congestion—to LTE subscribers, beginning on 1 October 2014. Mead made the statement after Tom Wheeler, chairman of the Federal Communications Commission, a U.S. regulatory agency, wrote to Verizon objecting to the fact that only customers on unlimited data plans would be affected. Mead said that the operator’s policy targets unlimited data customers because they tend to use the most bandwidth, adding that the throttling would be infrequent in any case. Mead denied Wheeler’s accusation that Verizon was using a network management policy to push customers to drop unlimited plans in favor of more lucrative usage-based plans. Unlimited data plans are still available from Verizon, though they do not come with subsidized handsets. Verizon’s plan targets the top 5 percent of unlimited-data plan subscribers, and the company has stated that it will only throttle data for these customers when they connect to certain cells at times of especially heavy congestion. Nonetheless, the FCC objects strongly to the idea of targeting any particular group of users. Chairman Wheeler wrote, “It is disturbing to me that Verizon Wireless would base its ‘network management’ on distinctions among its customers’ data plans, rather than on network architecture or technology. ‘Reasonable network management’ concerns the technical management of your network; it is not a loophole designed to enhance your revenue streams.” In citing revenue streams, he was clearly implying that the operator intends to drive customers from unlimited data plans to plans with data allowances. Kathleen Grillo, Verizon’s vice president of federal regulatory affairs, responded to the FCC by claiming that a small group of heavy users was taking up a “disproportionate amount of network resources” and having “an out-sized effect on the network.” Grillo added, “Not surprisingly, many of these heaviest users of the network are on unlimited data plans.” While we do not have any independent information as to Verizon’s motivation, if the operator were in fact using this throttling initiative to move customers away from unlimited plans, we feel this would be an ill-advised strategy. Verizon itself has stated that the vast majority of its subscribers are on usage-based plans already, so it seems likely that the advantage (in terms of revenue) gained by incentivizing a small group to change plans would be outweighed by the disadvantage (in terms of bad publicity) of appearing to treat subscribers in an unfair manner.

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx

Airtel Ghana Introduces Multifaceted Data Use Campaign

Mobile operator Airtel Ghana has introduced Browse Chaw, a campaign to promote the MNO’s data offerings. Customers can subscribe to a range of data allowance tariffs including a Pay as You Go option and a variety of postpaid bundles. Marketing Director Manu Rajan said that with the Browse Chaw campaign, the operator is offering a variety of data products—which he refers to as “customer centered data services”—that have been designed to meet its customers’ needs. In addition, Airtel is offering Data Rollover, an option which allows customers to roll over unexpired data amounts when they top up their bundles; DataKredit, a service in which subscribers can get data on credit from Airtel and pay for it with their next recharge; and a Single Recharge Option that allows users to recharge their voice and data services at the same time.

As early as 1992, Ghana was one of the first countries in sub-Saharan Africa to launch mobile services, and although the growth of the mobile market has outpaced the fixed market in the country—as is common in emerging markets—it has grown at a very slow pace, mainly due to poor signal strength. At the end of 2013, Ghana had a mobile phone penetration rate of about 110 percent. This growth, particularly in the voice market came at the expense of monthly ARPU, which had fallen below US $5.00 for some of the country’s operators. However, the potential for new growth has arisen with the availability of 3G service.

Airtel Ghana plans to invest GHC 200 million (US $65.9 million) in a nationwide network expansion, of which GHC 150 million (US $49.4 million) will go toward improved data services. We believe it is wise for the operator to improve and promote data services, as in many parts of the world data is becoming the prime revenue driver, rather than voice services. Whether in developed countries with 4G/LTE services or in emerging nations such as Ghana, customer-friendly data packages such as those being offered by Airtel can give operators an upper hand in attracting and retaining subscribers.

“Emerging markets, as well as technologically advanced ones, are data hungry. As we mention in two of this issue’s articles (about Airtel Ghana and Tesco Mobile), mobile operators tailor their data offerings accordingly to their markets’ needs and try to make data widely available. Whether they promote mobile data as part of a specific campaign or create innovative packages to fulfill their customers’ expectations, operators around the world are aware of mobile data’s value and its positive impact on revenue.”

Edyta Krzton, Senior Analyst at Tarifica

Samsung’s Q2 Profits Below Expectations

Korean device manufacturer Samsung stated that according to its preliminary figures, second-quarter revenues were KRW 52 trillion , down from 54 trillion  in the same quarter last year, and that operating profits fell 23 percent year-over-year, to KRW 7.2 trillion. Analysts had expected profits of KRW 8 trillion. In a statement, Samsung attributed the shortfall to increased competition in China and Europe and to soft smartphone and tablet sales. Samsung’s statement sought to contextualize the disappointing results and sound a somewhat optimistic note for the near future: “The second quarter is a seasonally weak period for smartphone demand in China. Samsung also saw an increase in inventory due to price competition and a weaker demand for 3G products ahead of the expected growth of 4G LTE products in the Chinese market.… The company cautiously expects a more positive outlook in the third quarter with the coming release of its new smartphone lineup.” Nonetheless, the preliminary Q2 figures for the manufacturing giant tell a larger story. One cause of Samsung’s difficulty is the rise of the big-screen (5- or 6-inch) smartphone, sometimes known as the “phablet,” which has been championed by none other than Samsung. Such devices have been cannibalizing tablet sales. In addition, with the maturation of smartphone technology, users are finding that their devices have sufficient functionality and durability that they do not have to upgrade them as often as before. And finally, Samsung and other high-end device manufacturers, such as Apple, are finding their domain encroached upon by cheaper and simpler handsets that, with the advance of technology, can now perform enough key smartphone functions to deter many consumers from spending the extra money on a state-of-the-art phone. The Samsung Q2 figures are by no means the last word on the Korean giant’s business, but they are part of an evolving narrative about the maturation of the worldwide device market.

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx