Prepaid churn: does price solve it all?

Melissa Chua
12 Aug 2011

Asia’s predominantly prepaid markets are a hotbed for customer churn, with anti-churn campaigns usually revolving around how low tariffs can go. But could there be more to prepaid customer retention that dollars and cents?

Methods that operators in the region have adopted for developing prepaid customer loyalty have centered on providing value for the customer. Several operators in India, including heavyweights Bharti Airtel and Reliance Communications, offer a lifetime guarantee of prepaid rates; competitor Uninor offers dynamic tariffs, where users’ tariffs are dependent on time of day and location, while Malaysia’s Maxis and Digi offer customers extensions on credit validity if top ups are made within a stipulated period.

With prices hitting as low as 1 cent per minute in certain markets, however, competing on price alone does little to differentiate an operator from its rivals.

“Users in prepaid markets feel no loyalty to any particular operator and the best way to cultivate a relationship could lie in the quality of the mobile internet platform on these customers’ feature phones,” says Motricity’s VP and general manager for the Asia Pacific Tom Cheong.

Motricity, which works on the customer facing mobile portals for AT & T, Verizon and Sprint in the United States, is targeting operators in predominantly prepaid emerging markets in the Asia Pacific. The company opened its Asia headquarters in Singapore two years ago, and currently services XL Axiata in Indonesia, Celcom in Malaysia, Reliance Communications in India, Robi in Bangladesh and Dialog in Sri Lanka.

Cheong, who dubs these emerging markets the ‘low hanging fruit’, said the needs of operators in developing Asia were largely different from those in the United States, which he describes as a more defensive marketplace. “Many users in Asia access the Internet primarily through the mobile, and this opens opportunities for operators to provide value-added services.”

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