The Driving postpaid migration in emerging Asia–Pacific: strategies for success

Emerging AsiaPacific mobile network operators (MNOs) can do more to migrate subscribers to postpaid offers they are underachieving comapred to MNOs in other emerging markets. Better assessing credit risk, improving the attractiveness of postpaid offers relative to prepaid ones, and tariff and digitalisation innovation are all ways in which MNOs could boost postpaid penetration.

About this report


EXECUTIVE SUMMARY


Executive summary


EMAP MNOs are not migrating as many customers to postpaid contracts as those in other countries


Better credit scoring, pricing innovation and improved differentiation from prepaid offers can all increase operators postpaid shares


Recommendations


BETTER ASSESSING CREDIT RISK


Bad debt is a significant and growing threat for EMAP MNOs seeking to drive postpaid penetration


Operators can use different approaches to assess the risks of offering customers postpaid subscriptions


The existence of credit bureaus can help increase postpaid penetration and MNOs can invest in such institutions


Prepaid customers usage data could be used to encourage postpaid migration, although such strategies are at an early stage


IMPROVING THE APPEAL OF POSTPAID TARIFFS RELATIVE TO PREPAID ONES


Postpaid prices in some markets are simply too high compared to prepaid ones to encourage growth in postpaid penetration


MNOs in Indonesia and the Philippines need to place more emphasis on developing affordable entry-level postpaid tariffs


U-Mobile and redONE have successfully driven postpaid growth by targeting the lower-cost end of this segment


Subsidies are not essential to drive postpaid growth in EMAP, but they can help do so


Removing some features from prepaid offers has helped to significantly increase postpaid penetration in Brazil


TARIFF AND DIGITALISATION INNOVATION


Fixedmobile bundles can help drive postpaid penetration True in Thailand is a good example of this


Attractive charges for out-of-bundle usage can play a role in driving postpaid penetration in EMAP


Innovation around unlimited data and voice offers can also ease customers concerns about out-of-bundle charges


Strong differentiation between on- and off-net calls makes little sense if EMAP operators wish to boost postpaid penetration


Digitalisation may result in greater convenience for subscribers and therefore has a role in driving postpaid penetration in EMAP


Digitalisation has played a role in Digis better postpaid performance compared to Maxis and Celcom, but it is not the only factor


APPENDIX


EMAP MNOs have higher postpaid churn than those in other emerging market, but postpaid churn is still well below prepaid levels


Most EMAP markets have very low credit card penetration, even compared to other emerging markets


Postpaid offers with add-on packages have played an important role in postpaid penetration growth in Peru


Additional data top-ups are not disproportionately more expensive in EMAP than in other emerging markets with higher postpaid penetration


ABOUT THE AUTHOR AND ANALYSYS MASON


About the author


Analysys Masons consulting and research are uniquely positioned


Research from Analysys Mason


Consulting from Analysys Mason


 


List of figures


Figure 1: Postpaid migration can deliver important benefits to EMAP MNOs


Figure 2: Nominal GDP per capita and postpaid share of active SIMs, 2016, selected countries


Figure 3: Three key focus areas for MNOs driving postpaid migration


Figure 4: Bad debt as a percentage of postpaid revenue, selected operators, 2Q 2017


Figure 5: Postpaid subscription requirements for selected EMAP operators


Figure 6: Postpaid share of subscribers and private credit bureau population coverage, selected markets, 2016


Figure 7: Prepaid and postpaid ARPU, selected markets, 2016


Figure 8: Change in ratio of postpaid to prepaid ARPU, selected operators, 1Q 20161Q 2017


Figure 9: Prepaid ARPU, entry-level postpaid price and ratio of these two measures, selected operators, 1Q 2017


Figure 10: Postpaid net additions by operator, Malaysia, 20132016


Figure 11: Ratio of postpaid subscriber acquisition cost to postpaid ARPU, by selected operator, 2016


Figure 12: Numbers of prepaid and postpaid SIMs and postpaid share of total SIMs, 4Q 20131Q 2017


Figure 13: Number of postpaid subscribers by type of offer and double- and triple-play share of postpaid subscribers, True, Thailand, 1Q 20151Q 2017


Figure 14: Average Net Promoter Score by amount of data allowance used, postpaid subscribers, Malaysia, 2016


Figure 15: Quarterly postpaid net additions and DTAC share of postpaid net additions, 1Q 20161Q 2017


Figure 16: Digitalisation initiatives that could drive growth in postpaid penetration


Figure 17: Postpaid subscriber net additions by MNO, Malaysia, 2015 and 2016


Figure 18: Prepaid and postpaid average monthly churn, selected operators, 1Q 2017


Figure 19: Credit card population penetration, selected markets, 2014


Figure 20: Active SIMs by type and total postpaid share of active SIMs, Peru, 1Q 20091Q 2017


Figure 21: Postpaid ARPU, price of additional 1GB top-up for postpaid customers1 and price of additional top-up as a percentage of postpaid ARPU by operator, 1Q 2017


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