As more operators implement a Dynamic Services strategy, they are seeing increased ARPU, profit margin growth and improved customer satisfaction.
As more operators implement a Dynamic Services strategy, they are seeing increased ARPU, profit margin growth and improved customer satisfaction. Take a look at some examples of Dynamic Services and the returns: • A Canadian operator launched data service passes to increase data adoption. Their aim was to remove any uncertainty over data costs by offering fixed volume, fixed duration data access (e.g. 60MB for 1 week for $5). The result: In the 60 days post launch the operator converted 15% of data pass users to a recurring post-paid data plan, and reduced billing credits by 98%. In addition, the operator was able to reduce the number of calls into customer care by 120,000 per year. This significant cost saving and revenue growth was possible because the operator was able to increase the consumer’s understanding and confidence, and as a result; their willingness to trial data. • An operator in the Middle East felt that they were missing a revenue opportunity from roaming traffic, due to the majority of their customers switching off data while roaming. By offering data roaming service passes–whereby a customer buys a fixed volume of data roaming access for a fixed duration–this operator saw an increase of 35% in data roaming revenues. • Multi-device shared bundles are now the default for several operators, Verizon have changed their reporting metric from ARPU to ARPA (average revenue per account) due to the fact that they consider that an account may have multiple devices. Within six months of Verizon launching shared device plans in June 2012, the operator had migrated 23% of their post-paid base to use the new plan approach. Likewise AT&T reported a healthy growth in multi-device data share plans in their Q4 2012 results. • A European operator has started to offer ‘add-ons’; speed and data volume over and above base plan, as well as music, TV, and cloud based options. The results: The operator is now seeing 25% data ARPU increase (yoy 2010- 2011), churn rate in subscribers to their cloud services is reporting at 25% less than average, and 10% of customers are now subscribing to additional data options. As well as driving 5%-10% of additional EBITDA, these advances are also enabling this operator to enjoy a higher % of data revenues than their competitors. At this point, there are many further examples of dynamic services being launched in the market on a regular basis. We’re only going to see more of this as operators push to increase revenues by being innovative in how they package, price and provide data services. If you have seen any other examples of Dynamic Services, please share them in the comments below.
