Deutsche Telekom Launches Zero-Rated Gaming Option, Special Youth Rates

Deutsche Telekom Launches Zero-Rated Gaming Option, Special Youth Rates

German operator Deutsche Telekom has released StreamOn Gaming, which enables customers to play online and multiplayer games on their smartphones without consuming data in their mobile tariff. At the same time, it has also revised its MagentaMobil Young tariff portfolio for customers under the age of 27, allowing them to add StreamOn Gaming to their mobile plans at no extra charge. For customers over 27 who subscribe to MagentaMobil and FamilyCard plans, the charge for StreamOn Gaming will be €2.95 (US $3.40) per month.

StreamOn Gaming features 17 games, including such popular ones as Pokemon Go and Fortnite, and the service can be added to all of the operator’s MagentaMobil Young tariffs.

DT is also increasing the data volume in its MagentaMobil Young XS and M tariffs for new and existing customers as of 31 August. The MagentaMobil XS will offer 2 GB instead of 1 GB of data per month, while the MagentaMobil M will contain 8 GB instead of 6 GB of data.

Tarifica’s Take

As mobile data consumption grows exponentially, among the market factors driving this growth is gaming. Gaming, both mobile and online, tends to require very large amounts of data to support its rich interactive features. In developed markets such as Germany, gaming is popular and relatively affordable. Therefore, for an operator such as Deutsche Telekom to create a value-added package of it is a good move.

Considering the large volume of data these games consume, charging a flat rate for a zero-rated package is a smart way of realizing revenue. Collecting €2.95 each month from subscribers is likely to bring in more revenue than charging for the data consumed on a per-megabyte basis, which may be prohibitive for many users. Zero-rating the data should have the effect of stimulating data consumption and thereby promoting higher-consumption habits among gamers, which could be monetized in various ways in the future.

Since gaming is particularly popular among youth, targeting that demographic makes a great deal of sense. By exempting those under 27 from the per-month charge for StreamOn Gaming, DT is not only responding to this group’s budget-mindedness but is also promoting loyalty at an impressionable time in a consumer’s financial life. And when those users age out of the group, they will be more inclined to start paying for the service, having already grown accustomed to enjoying its benefits.

And on that note, we may observe that increasing general-purpose data volumes for youths without raising prices has a similar effect in cultivating data-consumption habits that will yield future benefits in terms of revenue for the operator.