Pricing Promotions by Mobile Operators Worldwide28 Jan 2011 • by Natalie Aster
London – “Mobile promotions in mature markets are used as a way of providing a limited headline price reduction and for new customers which avoids impacting the installed base of existing accounts with an across the board price reduction.”
The report “Pricing Promotions by Mobile Operators Worldwide” by Tariff Consultancy Ltd considers a wide range of promotions. These promotions include price discounts for specific customers or time periods (including promotions for customer groups via clubs or segments) or types of on-net calls or SMS. The report also considers promotions provided by non-price means, such as additional air-time, Top-Ups or loyalty schemes which may be applied.
For the purposes of the report mature mobile markets can be defined when mobile subscribers reach or exceed 100 per cent of the population. Characteristics of mature markets also possess static or declining ARPU rates and the need for the management or reduction of customer churn levels.
Mobile operator promotions are typically geared to new subscriber acquisition and campaigns to increase market share and are used to differentiate similar services or introduce a new form of product into a mature market.
Published: January 2011
Price: USD 1,995.00
Report Sample Abstract:
Definitions of Price promotions in a mobile phone context
Promotional activities are classically seen as being part of a company’s marketing mix. The marketing mix consists of four elements including Price, Product, Place and Promotion called the 4 P’s.
Typically, there are two generic types of promotional activity that are available under the promotion banner. They are:
1. Above the Line promotions – which includes using media for advertising and which are highly visible to the customer;
2. Below the Line promotions - which includes price promotions and extra bonus features which are less visible to the customer.
In the report, TCL considers the Below the Line elements of mobile promotion that deal with pricing or extra value product offers that are made for a short term period only. These promotional offers are of two main types including added bonus features (such as extra airtime, minutes, data or SMS) or price discounts (such as credits, monthly price discounts or purchase discounts) made for a limited time period or quantity.
In Africa and South America in particular mobile operators are providing lottery or competitions either as a reward or as a means to encourage higher value or more frequent PrePay Top Ups.
Mobile operators are using below the line promotional schemes as a means of attracting new customers for a limited duration time period.
But from the report the use of mobile promotions is focused on the PrePay customer segment, with the Pay Monthly user being the focus of loyalty programmes – increasingly with third party discounts offered as part of a club of users through a web portal.
The PrePay segment accounts for around 90 per cent of mobile subscribers in Latin America and Africa – where markets are rapidly approaching maturity. In these markets promotions are based on competitions and continuous short term discounts for new SIM subscriber registrations. Other countries which provide frequent PrePay promotions include the Philippines, Pakistan and India.
Also, there is a correlation between the use of mobile promotions and new service launches particularly in mature markets with high subscriber penetration rates where a reduced headline rate is used to attract new customers and win additional subscriber market share.
For PrePay customers the emphasis is on stimulating greater intensity of use with more Top Ups. In mature markets operators are aiming to stimulate usage to avoid becoming a victim of ‘secondary SIM’ syndrome, where the user typically has multiple SIMs and can use many different operators. A promotion is geared at stimulating extra usage of the secondary SIM.
Additionally the use of promotions for a mobile service are used to lower the headline price rate for a short term period – which will be focused on new customers - without providing a price cut across the operator’s whole customer base. Promotional pricing is used as a low cost alternative to a more general price cut and is more focused.
Promotional pricing also is used as a way of disguising the overall price paid by the user with extra bundles being included for a flat rate fee. In return for a commitment by the customer – such as a regular PrePay Top Up made every month – bonus calls or SMS are provided. The use of promotional pricing also makes the task of making a like for like comparison between mobile operator tariffs more difficult.
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