Singapore (April 27, 2010) /ChinaNewswire.com/ — No bills, no marketing collateral. Just you and your mobile. The reason why 85% of Indian Telco customers are on pre-paid could simply be convenience. India has about 17 mobile providers who cater to approximately 550 million subscribers. China on the other hand has 3 mobile providers catering to approximately 750 million subscribers.
Malcolm Logan, CEO of Opraxe International, believes that based on the above statistic there are different market opportunities and challenges faced by operators as well as different approaches they need to take to address these issues: "India is far more competitive and focused on addressing and creating marketable prepaid segments to drive growth. These include the micro markets and balance dollar spend approach on each. Indian operators have almost stopped looking at ARPU as a performance measure. They tend to address the market as organizations that sells "minutes" – so to do that you need to know what the minutes cost and how much you can make (in a competitive market) from these minutes."
The issues facing prepaid mobile in North Asia will be discussed June 22 – 23, 2010, in Radisson Hotel Pudong Century Park, Shanghai, at the Prepaid Mobile North Asia 2010 conference. Participants from around the region will look at the issues facing this mobile sector.
Logan continues: "The challenges for the Telco's then are to focus on specific and yet to be addressed market segments that will return value back to them, while not cannibalizing their existing segments – and on the other hand, improving their already defined market segments with creative and relevant product options and capabilities to maintain and grow their position.
"China on the other hand was a market that developed in a different fashion. Competitive offers and marketing campaigns were not at the forefront of their thinking when they started as they had a captive market where consumers simply wanted a mobile phone – any phone, any product, any service. Demand simply outstripped the need for carefully crafted retention and loyalty mechanisms. To an extent it still does, however, activity in retaining customers is now coming to the forefront – especially with the increasing number of providers that will come into the market over time, so I expect to see some specific agreements, features and network expansion taking place," said Logan.
According to Logan, consumers in both countries will continue to, and expand their use, of prepaid offerings not only for communications, but also bill paying, micro-payments for goods and services and such like. Operators who have the right thinking, information available and understanding of the evolving behavioral aspects of consumers will relish the opportunity.
Gareth Kentish, Director of International Sale, Telecoms, Hansen Group sums it up perfectly. In emerging markets, pre-pay is the norm and churn is generally high with modest ARPU. Competition for 'land-grab' is rife.
"In both mature & emerging markets, pre-pay is essential to build the base and to ultimately cross-sell with VAS. Increasing ARPU by extension of portfolio is effective for an affluent customer base. The objective is to create the "sticky customer". Consider automated top-ups, transparency of call details, family accounts, even combining pre/post-pay services, set-up loyalty and reward schemes. Know your customer-base – introduce dynamic discounting," he said.
For more on addressing the challenges in the pre-paid mobile sector in Asia please visit Prepaid Mobile North Asia 2010.