AT&T Mexico has recently launched a new offer in which all prepaid customers who top up by at least MXN 100.00 (US $4.63) will receive a free 7 GB data bundle for streaming video content. The bundle is advertised as being for use on YouTube, but it can also be used to access other platforms such as Netflix, Amazon Prime and HBO Go, albeit at 480p rather than HD quality. The promotion will run until 9 January 2020.
The U.S.-based operator added 668,000 Mexican prepaid customers from September 2018 to September 2019 to reach an overall customer base of 18.6 million, up 7.6 percent year on year.
Tarifica’s Take
Formed from the merger of operators Iusacell and Nextel under the aegis of the U.S. operator AT&T, AT&T Mexico has been in business for five years and during that time has come to control the majority of the country’s spectrum. The operator has achieved success in part by leveraging the close ties between Mexico and the U.S., offering customers on either side of the border advantageous deals on service and effectively unifying the two countries into one service area.
As Mexico is a developing market, there is strong support among customers for prepaid service, and AT&T has seen a significant uptake in that regard, with 668,000 new prepaid customers added over the past year, approximately. However, one issue with prepaid customers is that while they technically have the service, they may not be using it very much or even at all. Having the holders of AT&T SIMs not using those accounts is a problem that the operator seeks to remedy by incentivizing those subscribers to utilize the network.
Under the current offering, the incentive to spend at least MXN 100.00 is the gift of 7 GB of free data. That is a generous offer, in our view, especially given the fact that the amount of money in question is actually fairly modest. Promoting the data as being specifically for YouTube and then allowing it to be used for other streaming services is a clever approach, as it creates the feeling that the other uses are above and beyond expectations. Ordinarily, the lack of HD would be a distinct strike against this offering, but in context we do not think that it will be. These prepaid customers who make little use of their service are likely to be relatively undemanding in terms of image quality and will probably be thankful to have a free 7 GB of access to video streaming content.
If the offering proves persuasive, it should have the effect not only of stimulating spending on the part of the prepaid customer base but also of maximizing utilization of AT&T’s network, which is of course a desideratum for any mobile operator.