Brazilian MVNO Veek has updated its freemium plan, which provides free mobile phone service in exchange for watching video ads, according to a report. From now on, watching the first video of the day earns users 60 minutes of calls, while the following videos entitle users to 30 minutes of service each. It is possible to watch several videos one after the other and accumulate six hours of continuous use per day.

Freemium users who were entitled to 1 GB per month can purchase additional data separately. Also new is the subscription-based plan Ultra, which has several data options ranging from 5 GB for BRL 30.00 (US $6.43) a month to 50 GB for BRL 100.00 (US $21.45) a month.

Veek has an estimated 20,000 users, of which 85 percent use the freemium model.

Tarifica’s Take

This so-called freemium plan from the Brazilian MVNO Veek has two ways to drive revenue for the operator. One is via ad sales, according to which the operator is paid by advertisers whom it can guarantee viewers for their ads. The other is by potentially upselling subscribers, who may end up wanting to use more data than their watched videos would provide. They may either purchase more on an ad hoc basis or else subscribe to the Ultra plan and take a pre-ordained amount of data per month.

For some users, the freemium is a gateway to greater data use, so that it is eventually left behind in favor of more traditional models of paying for data. For the less data-intensive, remaining with the freemium will be more palatable; in their case, ad sales will compensate the operator.

This two-tiered approach works well for an MVNO such as Veek. MVNOs generally position themselves in the marketplace as solutions for budget-minded customers. For such customers (the vast majority of Veek’s base, to date) a no-charge service is bound to be very appealing, and viewing video ads is not likely to be much of an impediment, if any. And for those who are willing to pay for more, the prices are still very affordable.