It’s become almost a cliché to say consumers are becoming a disruptive force. So it’s extremely instructive to look at how the communications service provider industry is responding to the consumers who are impatient for the best possible service at the best possible price.

Mobile communications has rapidly changed over the last five years. Smartphones have gone from an elite device to the powerful connected device used by the masses.

Given the choice available of affordable Android smartphones, consumers can easily shop around for the best deal. What’s more, they are increasingly waking up to the advantages of contract-free phone plans. This offers greater flexibility for subscribers as it means they can choose to pay the full amount for their device, but then enjoy a cheaper data package from their mobile operator. As a result of today’s post-recession marketplace and consumers keen to make cost-savings, prepaid plans have become popular.

These days, smartphones are typically offered with prepaid plans that include data, content, app stores, messaging and other services which were previously only the province of postpaid users. This means that mobile operators have to provide these more sophisticated services to try to meet the growing demands of prepaid consumers, as well as driving sales.

In fact, according to research from Ovum, 73 percent of mobile operators would like to expand prepaid offerings or have already begun doing so. And the majority of operators are also offering high-end devices, such as smartphones, to complement these new services.

Another important thing to note is that the share of network traffic from data has grown to 98 percent. Therefore it’s no surprise that mobile operators are under increasing pressure to offer compelling, and competitive, data plans.

Furthermore, as per a recent independent report from market analysts, Analysys Mason, mobile operators have a growing need to charge for data which has been delivered over mobile broadband, as well as for new types of data plans, such as shared family and device plans. These types of plans reflect how mobile operators are diversifying their offerings to meet the needs of new types of customers, for example families with multiple children who all have smartphones, as well as working out ways to best monetise them.

Like their counterparts in other industries, telecom digital marketers need to be aware of changing demographics and adopt new and different pricing models in accordance. With consumers expecting a high quality experience with some change still left in their wallet, marketers need to be on the ball to respond to this trend.

Looking into who is buying these prepaid smartphones is an important first step for marketers. At the moment, it seems to be the lower-income market segment, with NPD identifying 71 percent of prepaid smartphone buyers this year as having an average income less than £22,000.

But even as it seems to be over, the recession has had a lasting impact on how consumers buy digital services and devices as it had on their shopping for groceries in discount stores. People look to make savings all the time so a prepaid subscription might well become the next middle-class trend. Something marketers will need to watch out for and adjust their strategies as appropriate.

 

By Michal Harris, Head of EMEA Marketing at Amdocs. 

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