22 Nov 2010
Mobile money services are the most popular category of launch, and these have brought huge benefits to users, while also earning substantial revenues and profits for operators. However, not every mobile money service will achieve the same high level of success.
Encouragingly, operators are also reinventing voice. Whether it is with HD voice, visual voicemail, or voice SMS, there are now opportunities to derive more revenues from the basic voice service, even if these are only in the short term.
There is even an example of how to release the hidden value in a basic, and previously free, service. Vodafone’s “Name Your Number” service in Romania demonstrates how operators can monetize the willingness of people to choose their own numbers.
New services are not all going to generate additional revenues or profits for operators. In fact, many of them will be a drain on operators, with no prospect that they will turn enough profit to justify the investment in time and money.
However, operators have significant strategic reasons for launching them. These can be as varied as using the service as a loss leader in the market, leveraging the service to boost the operator’s brand, or helping the operator to defend an existing competitive position.
This last point is particularly crucial, and as MTN and Zain have shown with their mobile money services across Africa, it is foolish for operators not to take action to prevent their competition from outflanking them in the market.
Some other innovations take a more circuitous route in adding value to the operator. This is most pronounced for services that straddle the boundary between marketing and innovation, such as Cell C’s deal to offer Nike Football+ in South Africa.