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Many Latin American operators have recently started offering free access or access without using data allowance for selected applications, generally to Facebook and Twitter, while TIM Brasil is also offering free access to real-time traffic app Waze. The operators’ main goal is to take advantage of the popularity of these apps to drive the adoption of mobile data services by its prepaid users.
The “free” plans are not only a way to enable customers to start using the basic features of these applications, but also encourage clients to use more and, eventually, compelling them to sign up for a data plan. However, operators have to bear in mind that both Twitter and Facebook have a lot of content and links that take the user out of the application and customers can get frustrated if they cannot access the content. Operators can improve customers’ experience by offering them the chance to buy extra data allowances.
Mobile operators can strongly impact price-sensitive prepaid customers with this type of offer. These users need to perceive the value and relevance of data services in order to be stimulated to subscribe to a data plan. Currently, one of the main challenges for mobile operators is to increase prepaid average revenue per user, which is still as low as $2 to $8 monthly for 54% of the operators, according to the survey that Informa carried out in emerging markets in the beginning of 2014. Telecom operators also have to increase prepaid customer loyalty, with churn rates at around 5% to 20% for 46% of the operators.
Mobile operators cannot keep ignoring the prepaid segment’s potential to increase service revenues through data services. Prepaid customers represent more than 80% of the total subscriptions in Latin America and offer an untapped opportunity. Providing customers with a chance to try the data services for a limited period increases the likelihood that they will adopt new applications in the future.
Marceli Passoni is a senior analyst with Informa Telecoms & Media, covering Latin America. She examines the region’s operators’ strategies and performance, ongoing regulatory issues, networks deployments, new products, service launches and analyzes the key trends in the region. Passoni is a frequent speaker and chair at conferences, as well as a regular press commentator. Her recent research interests include LTE spectrum auction in Latin America, mobile market trends, voice pricing future and multi-play strategies. Passoni joined Informa Telecoms & Media in August 2010 as a research analyst. Prior to that, she was a senior analyst with mobile operator Vivo in the strategy planning area. Passoni holds a degree in Business Administration from PUC and is a post-graduate in Management Services at ESPM in São Paulo.
