Abstract
MNOs in developed markets face increasing levels of competition from the entry
of low-cost MVNOs and from their traditional rivals for market share. Customer
relationships are key to retaining customers and can even help MNOs to resist
erosion of prices, as long as the relationship is close enough and the
customer perceives that the MNO is committed to his or her best interests. It
has been very difficult to develop a relationship with a customer that may be
known only as a phone number and the attractions of the prepay approach to
customers (mainly, no credit checks, anonymity and flexibility to not spend)
represent barriers to developing a relationship that are increasingly
important to MNOs wishing to stimulate usage and attack churn. The greater the
proportion of the base that is in a prepay relationship, the more important
this issue becomes. To combat the rise of criminality and terrorism, states
are increasingly requiring operators to collect information about prepay
users, though this may not benefit them, as the information collected may not
help in marketing (and they may not even be allowed to access it for privacy
reasons).
This report examines what operators are doing to help develop fruitful
relationships with prepay customers that they can exploit to increase ARPU and
acquisitions and help contain churn. The report concludes with a set of key
findings and recommendations aimed at MNOs on how to improve and manage
relationships with existing and new prepay customers.
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