Uptake for the service has been slow in some markets where there is confusion about net neutrality and zero rating of services. Also in high arpu countries some may argue that ‘free’ data is not that compelling If my average spend per account is $150+ per month it stands to reason that a zero-rated banking app that will save 10-20Mb of my usage will be of little relevance.

Does a business case exist for a 3 sided model where operators, content providers and consumers all win? My contention is that it does but let’s move the discussion beyond conjecture and into the realm of fact and figures.

Let’s examine if the initial thesis that consumers are more likely to consume content from a third party provider if the data usage for that content is zero rated. In the summer of 2014 Slate.com were seeking ways of boosting traffic to their online magazines podcasts. Slate told some would-be listeners that the podcast wouldn’t count against the data plans on their smartphones. It turned out that group was 61% more likely to press play, example number 1.

In Q3 2014 DataMi conducted a study in partnership with Trove, a fledgling news curation site that spun out of the Washington Post. Results of the study found users viewed about 40% more pages when their data consumption costs were covered, example number 2. So now that we confirmed that consumers like free stuff as a universal truth does it make sense for communication service providers?

This one is a little easier to prove as CSP’s are in the business of selling data access and if third parties are in the market to buy they will gladly oblige. In order to avoid cannibalization of existing customer usage revenue operators will typically look for a premium price per Mb from third parties. So if consumers are more likely to engage with services and a CSP is willing to provide the service, does it make sense for third parties to pay for sponsored access to content/services?

On a recent Openet blog my colleague Julia Hogarty outlined the case of the Brazilian Bank Brandesco. They turned to Sponsored Data as a means to encourage clients to use its mobile banking services, for which the cost per transaction is a mere 5% that of in-person channels. The bank more than doubled mobile banking users in a little over a year. So let’s examine their business case from the outside in:

• If blended ARPU in Brazil is R$20 or €4.33 per month let’s assume that 1GB of usage costs €1.08 or €0.01c per Mb
• 1 minute of general mobile browsing accounts for about half a Mb of data usage
• Consumers spend an average of 37 seconds per visit on a finance or banking app which accounts for an estimated 0.3Mb per visit
• If a customer access their mobile banking app once daily this accounts for 9.3Mb per month or circa €0.1c per month to sponsor a customer’s mobile banking usage, a paltry amount by any markets standards
• Based on the cost savings of a customer conducting their banking on mobile versus in person visits this business case is open and shut even if the cost per Mb in this instance is multiples higher

If this model stacks up in the financial services sector it will absolutely do the same for verticals like healthcare, retail, media and entertainment.