Here’s a question for the telecom industry: have we reached perfection when it comes to data monetisation?
Small, Medium, Large, Extra Large. The per-GB model is practically an industry standard for mobile service monetisation. It’s effective in that it recognises consumers’ strong appetite for data and their willingness to pay for more gigabytes if given the opportunity.
However, there’s an interesting evolution in operator attitudes toward data. Some are now offering data as a sort of carrot on a stick – digital currency, if you will, with which they can earn more subscribers, win long-term customer loyalty and improve adoption of other revenue-driving services.
Gigabyte as currency is a compelling proposition because it allows operators to leverage an asset that they have and that customers want to deliver greater value and achieve bigger results. Here are a few examples of operators who have put the gigabyte as currency model into action.
Data as a Reward
If you have data, why not give it away to loyal, reliable customers? That’s what Sprint sub-brand Boost Mobile does in the United States. Customers who pay their mobile bill on time for three straight months earn an additional 500 MB of data. Six straight months of reliable payments earns you an additional 1 GB of data. The rewards continue the longer you stay with Boost and stay current, all the way up to 3 GB of extra data.
“Have we reached perfection when it comes to data monetisation?”
KDDI in Japan offers long-term customers a “long-term hospitality” bonus in the form of extra data, which kicks in during the first month of your sixth year of service. This bonus only grows with time, incentivising customers to hang on with KDDI for the long haul.
Other operators rely on data rewards to encourage the addition of new subscribers or improve the uptake of other services. Vodafone in Australia offers additional data if you add more SIM cards – effectively, users – to your plan, while KPN customers can double their mobile data allowance if they also subscribe to fixed broadband services. Similarly, AT&T hands out extra data to customers who partake in surveys or who shop with AT&T partners.
Data Borrowing and Sharing
The data stash model was innovated by 2degrees in New Zealand in 2013, brought to America by C Spire, a regional operator in the Southeastern U.S., then popularised by T-Mobile and copied by several other major global operators. The idea is to save unused data for later use, most often in a month-to-month roll over plan.
Korean operator KT took this concept a step further with a creative data borrowing option. If you’re close to reaching your data limit in any given month, you can borrow a portion of your next month’s allowance. This builds in customer loyalty – a mobile user who is borrowing data from next month is practically guaranteed to remain a customer next month.
Other operators allow customers to share data – KDDI, for example, lets you send a Data Gift to a family member if you have a surplus of unused data. These models enable flexibility for the consumer, which encourages brand loyalty and long-term customer engagements.
Data is an Asset. Use it Wisely.
Why shift from the per-GB model if it’s actually working for most operators? Truthfully, most customers only buy per-GB because that’s how operators sell it, but there’s room for improvement if operators rely on data to support different areas of operator growth, including data consumption, customer loyalty and service demand. Finland, where 43 percent of users receive unlimited data, is by far the world leader in average consumption of mobile data.
Looking forward to a fully digitised world – in which consumers seek out more subscription-based streaming content and apps, and connected devices offer intelligent, data-driven real-time services – it’s time for operators to think creatively about how they leverage data to satisfy customer demand and drive operator revenue. Consequently, our industry needs to find new monetisation models for mobile data that can enhance and complement the per-GB model. Time-based data monetisation, as proposed by Comptel, might prove to be the most powerful complement.