Thursday, 29 June 2017

Digi encourages prepaid feature phone users to adopt mobile broadband

By Mary Lennighan, Total Telecom, in Singapore
Thursday 21 June 12

Malaysian mobile operator identifies common challenges facing Telenor Group's Asian businesses, including low ARPUs, literacy rates and the prevalence of feature phone users.

Digi Telecommunications, Malaysia's largest mobile operator, is working hard to drive mobile broadband usage, but the nature of its customer base means there are a number of hurdles to be overcome. One of its biggest challenges is the mobile device, with many customers still using feature phones, having not yet upgraded to smart devices. "This happens to be the number one phone in the Digi base," said Praveen Rajan…

Digi Telecommunications, Malaysia's largest mobile operator, is working hard to drive mobile broadband usage, but the nature of its customer base means there are a number of hurdles to be overcome.

One of its biggest challenges is the mobile device, with many customers still using feature phones, having not yet upgraded to smart devices.

"This happens to be the number one phone in the Digi base," said Praveen Rajan, head of Internet and service at Digi Telecommunications, showing CommunicAsia delegates an image of a Nokia N70 handset. "It doesn't give you the best Internet experience," he said.

Unsurprisingly, there is a direct link between the sophistication of a customer's handset and the amount of data s/he uses. Digi's smartphone users, who make up 22% of its 10 million strong mobile customer base, consume on average 700 MB of data per month, compared with 5 MB for feature phone users.

Its goal is to grow that smartphone percentage. "It's about moving more and more customers… to buy a smartphone," said Rajan.

Another difficulty for Digi is the number of prepaid users it serves and the low revenues they tend to generate; 84% of Digi customers use prepaid services.

And this, like the feature phone issue, is a common trend across Telenor's Asian footprint; the Norwegian incumbent owns Digi as well as operators in another four Asian markets.

"We operate in a predominantly prepaid market," said Rajan, explaining that average revenue for a Digi prepaid user is 40 ringgit (or US$13.50) per month. Prepaid ARPUs are even lower at other group companies, ranging from $7.25 at DTAC in Thailand, to $2.42 at Telenor's Bangladesh and Pakistan operations, and just $1.90 at India's Uninor.

The group also faces "literacy and language barriers," Rajan said. Subscribers' proficiency in the English language also has an impact on the take-up of mobile broadband services, he noted.

The telco is undertaking a number of initiatives – many of which are also being used in other Telenor Group markets – to drive mobile broadband. On the handset side, these include offering a co-branded Opera Mini browser to compress traffic and therefore keep data usage down, and offering white label smartphones from low-cost Android phone makers like Huawei and ZTE.

There is also much that can be done when it comes to tariff plans. In Malaysia and Thailand it has launched a range of clearly-marked smartphone-specific packages that can be sold in the mom and pop outlets that sell prepaid phone plans. In addition, "the need for worry-free Internet pricing" is particularly important for prepaid users, said Rajan. As such, Digi automatically caps spend at 8 ringgit ($2.50) per day, regardless of the customer's tariff plan.

The telco is also heavily pushing time-based packages in small denominations. "We go down to as low as an hourly package," Rajan said. In Thailand, DTAC charges 1 baht, or less than 5 cents, for this plan, he added.

The popularity of social networking service Facebook can also be a useful tool for operators looking to encourage mobile Internet usage.

Facebook offers a Java-based app that gives users a smartphone experience on a feature phone, Rajan said. "You'd be surprised by how good that experience is."
 

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