VAS Opportunties in a Downturn Economy: Repackaging traditional services
The current world recession is leading businesses and consumers to curtail spending, which is expected to affect growth and revenues during 2009.
Every day we hear about how operators are preparing to face this economic downturn with layoffs and by reducing CAPEX and OPEX; just last week, AT&T announced plans to cut 4% of its work force (Cellular News); Sprint Nextel is also expected to announce job cuts in 2009 (Cellular News). In Latin America, Millicom recently announced that 2009 CAPEX will be “substantially lower” than in 2008 and Telefonica stated last week that the region will continue to grow, but at a slower rate than previously expected.
Despite the current economic downturn, there are opportunities operators have to introduce new services with minimal CAPEX.
By analyzing end user behavior, traditional services such as Voice Mail, SMS and MMS can be repackaged and launched as new services, leveraging existing VAS infrastructure and reducing CAPEX normally required for new services.
Instead of the typical "one size fits all" strategy, operators can launch a segmented offering, building new services on top of existing ones. A good example of this is Voice Mail, which tends to have similar usage patterns with operators around the world:
These services can be launched as Premium Voice Mail, improving the user experience and increasing ARPU for the heavy users segment.
Mass users can also benefit from these services. Voice Mail to MMS, for example, can be offered to mass users, using SMS delivery as a fallback mechanism for those subscribers that do not have MMS capabilities.
Finally, the low usage segment also offers opportunities with services that address their specific needs. This segment is price sensitive and tends to use texting instead of Voice. This group can benefit from services such as Missed Call Alert or A party notification. In practice, both services replace a phone call with an SMS notification, which fits well with this segment's usage patterns; in addition, both can be deployed on top of existing voice mail infrastructure with minimal CAPEX investment.
An added bonus of a segmented offering is using target advertising, which is more cost effective on a per subscriber basis; some services such as missed call alert can actually be launched with a well planned below the line campaign.
Some of the services mentioned will require expanding infrastructure due to increased MMS and SMS traffic, however, it will be for the benefit of operators since it will translate into increased revenues.
Repackaging existing services is a wise strategy in an economic downturn; it allows operators to introduce new services with minimal CAPEX, providing a faster ROI for new investments and increasing productivity by utilizing existing infrastructure.
Every day we hear about how operators are preparing to face this economic downturn with layoffs and by reducing CAPEX and OPEX; just last week, AT&T announced plans to cut 4% of its work force (Cellular News); Sprint Nextel is also expected to announce job cuts in 2009 (Cellular News). In Latin America, Millicom recently announced that 2009 CAPEX will be “substantially lower” than in 2008 and Telefonica stated last week that the region will continue to grow, but at a slower rate than previously expected.
Despite the current economic downturn, there are opportunities operators have to introduce new services with minimal CAPEX.
By analyzing end user behavior, traditional services such as Voice Mail, SMS and MMS can be repackaged and launched as new services, leveraging existing VAS infrastructure and reducing CAPEX normally required for new services.
Instead of the typical "one size fits all" strategy, operators can launch a segmented offering, building new services on top of existing ones. A good example of this is Voice Mail, which tends to have similar usage patterns with operators around the world:
- Heavy users typically represent up to 8% of total subscribers and have a high ARPU. Usually this group is made up of corporate / business users.
- Mass users make up the second segment and usually represent approximately 30% of total subscribers. They usually have a lower ARPU than the previous group but because of their size, are the largest source of revenue for this service.
- Low usage subscribers and non users make up the largest group, representing more than 50% of all subscribers.
These services can be launched as Premium Voice Mail, improving the user experience and increasing ARPU for the heavy users segment.
Mass users can also benefit from these services. Voice Mail to MMS, for example, can be offered to mass users, using SMS delivery as a fallback mechanism for those subscribers that do not have MMS capabilities.
Finally, the low usage segment also offers opportunities with services that address their specific needs. This segment is price sensitive and tends to use texting instead of Voice. This group can benefit from services such as Missed Call Alert or A party notification. In practice, both services replace a phone call with an SMS notification, which fits well with this segment's usage patterns; in addition, both can be deployed on top of existing voice mail infrastructure with minimal CAPEX investment.
An added bonus of a segmented offering is using target advertising, which is more cost effective on a per subscriber basis; some services such as missed call alert can actually be launched with a well planned below the line campaign.
Some of the services mentioned will require expanding infrastructure due to increased MMS and SMS traffic, however, it will be for the benefit of operators since it will translate into increased revenues.
Repackaging existing services is a wise strategy in an economic downturn; it allows operators to introduce new services with minimal CAPEX, providing a faster ROI for new investments and increasing productivity by utilizing existing infrastructure.
Comments
Post a Comment