Making money from prepaid data

Joseph Waring & John C. Tanner
11 Oct 2012

Smartphone penetration in developing markets in APAC is estimated at just 5%. But that's projected to increase by more than four-fold between 2011 and 2016, according to Strategy Analytics. There are already smartphones available for under $100, and in some cases under $50.

Meanwhile, the smartphones that have already reached Asia's developing markets represent a huge market opportunity for mobile data services as affordable smartphones become available to people whose first internet experience has been - or will be - with mobile devices.

However, operators in developing markets can't simply look to their developed-market counterparts for business models targeting smartphone users - at least not beyond the small percentage of wealthy urban users. It's not a question of what "G" the network supports so much as the fundamental differences between the market segments themselves, says Warren Chaisatien, strategic marketing manager at Ericsson.

Ajay Sunder, Frost & Sullivan's senior director for telecom, Asia Pacific, says operators are developing innovative bundles of voice, SMS and data to target the growing population of smartphone users. He says there is a huge potential for prepaid data services, and operators are just starting to tap this segment.

"The growing number of prepaid data and bundled plans and their popularity are a testimony of this opportunity."

A recent study from Ericsson's ConsumerLab covering Southeast Asia reports latent demand for mobile data services that not only conform to the prepaid experience - top-ups, passes (either time-based or session-based), boosters (i.e. paying a bit extra for a better game or video experience) and cross-service bundles - but also are application and/or content-specific whenever possible (i.e. Facebook, YouTube, Twitter, etc), allowing users to buy the exact services they want.

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