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The lure of free Wi-Fi

By June 18, 2015 No Comments

No matter what operator you look at there will always be a proportion of that operator’s customer base that is made up of a particularly cost sensitive segment. It is this segment that will happily move to another operator if they perceive the value to be better and it is also this segment that will happily seek out the best deals on their data usage. Most importantly, for an operator, it is this segment that if left unmanaged can contribute to lost data revenue.

The recent growth in free Wi-Fi hotspots, competitors offerings of Wi-Fi bundles and the importance customers are placing on Wi-Fi itself is becoming a bit of a challenge for operators when it comes to keeping cost sensitive customers on their own cellular network.

Subscribers are becoming increasingly tech savvy and operators are facing a challenge in keeping cost sensitive customers on their own network as opposed to free public Wi-Fi hotspots. The lure of free data and the fact that subscribers are now aware, willing and able to find free Wi-Fi means that some operators are missing out on potential data revenue.

On top of this there is also competition developing in the form of competitors Wi-Fi Hotspot bundles. Africom, a converged service provider in Zimbabwe, has introduced a number of Wi-Fi Hotspots, the aim of which is to promote low cost data usage. The Wi-Fi bundles are broken into straight forward usage bundles, time-based bundles and Family bundles. In addition, once a bundle is purchased WhatsApp is provided free of charge. If your own provider is not competitively pricing their data plans then the temptation to avail of a cheap and relevant Wi-Fi bundle will be strong.

Openet wrote an interesting paper last week titled “Top Ten LTE Service Innovations”. One of the use cases discussed in the paper is Micro Service Passes as a means to combat this lost revenue. There are many cost sensitive subscribers who are not willing to sign up to the data packages being offered by operators due to the fact that they do not represent good value or are just too high an investment. Micro Service Passes can act as a means to entice these subscribers to start using a cellular network for their data needs.

One approach is offering a straight forward low cost, low data and time sensitive pass such as the case with MTN South Africa who are offering a host of options such as a 1 day; 5MB pass for ZAR 4. Another option for operators is offering a service pass based on a certain application or set of applications as is the case with Telcel in Zimbabwe who offer various WhatsApp and Facebook service passes such as a 1 day unlimited WhatsApp or Facebook pass for 29 cents. No matter which way you look at it, benefits are there to be had, for both the operator and subscriber; the operator drives increased data usage and subsequent revenues and the subscriber does not have to search for free Wi-Fi spots but instead has affordable relevant plans at their fingertips.

With Mobidia reporting that 80% of Mobile Data in the US is consumed over Wi-Fi it is obvious that there is plenty of opportunity for Operators to reclaim some of this usage and the revenues that go with it. There is extensive material on the benefits of Wi-Fi for mobile operators in combating network congestion but it also seems that it still poses a risk in some instances.  The good news is that operators have the tools and direct line of communication to the subscriber to push these low cost personalized offerings.