Algerian mobile operator Nedjma has signed a distribution agreement with the country’s postal service, Algerie Poste, to sell Nedjma services at 3500 post offices around the country. As part of this public-private partnership, Algerie Poste delivery staff will provide electronic top-up services to customers in remote locations when making their assigned rounds.

Tarifica’s Take

While Nedjma’s move is targeted primarily at low-end users in the remote, rural areas of a developing country, its approach got us to thinking about possible growth opportunities for mobile operators elsewhere through similar partnership arrangements. We believe such partnerships offer additional ways by which operators can reach potential new customers. Moreover, the concept of providing access to products and services via physical locations other than the operator’s traditional retail facilities could work well in both developed and developing markets. Partnerships could be private-private or public-private, as in Algeria. We believe that retailers, especially those with large national footprints, represent fertile territory for expansion. MVNOs in particular could benefit from this approach, since they tend to lack the size and infrastructure needed to cover a national market.

To be clear, we are not referring to retailers that sell mobile services as part of their core business (e.g., Best Buy in the United States). Instead, we are recommending the approach be extended to retailers that are not otherwise involved in the sale or provision of mobile services – examples include department stores, home improvement stores, supermarkets, restaurants, auto dealerships, fuel/petrol/gasoline stations and pharmacies. As in Algeria, the postal service represents another opportunity for expansion on a national scale. Operator presence in these venues could take the form of staffed kiosks where products are sold and accounts serviced, or even unmanned self-service kiosks which are set up to allow visitors to connect remotely with customer service representatives located elsewhere. While none of the aforementioned potential partners are in the telecom industry, we imagine many would be delighted to partner with an operator as a way to improve sales.

Besides providing the opportunity to reach a large swath of the nation, such partnerships can also help the operator create a brand identity among a coveted group by aligning with a retailer that is synonymous with that group. For example, if an operator is trying to reach the youth market, it could seek out a popular retailer selling apparel to that demographic. If an upscale clientele is preferred, a high end department store or luxury auto dealer might work well as a means by which to reach it. On the business side, home improvement stores could be a great way to connect with construction and contracting firms. In short, we view this as an innovative if somewhat unconventional approach to marketing that should be given serious consideration, especially by MVNOs looking to gain leverage in a world dominated by MNO giants.