Telecom Italia’s low-cost brand Kena Mobile has altered the conditions of its three main plans and is now pledging to offer the tariffs to customers on a permanent basis without any changes. On its website, the operator said the economic conditions of its Kena 7.99, Kena 9.99 and Kena 12.99 plans are no longer temporary and will be valid indefinitely. Kena 7.99 comes with 50 GB of data and unlimited calls and SMS to all national numbers for €7.99 (US $9.66) a month. It is available for new customers activating a new number and there is a one-off €4.99 (US $6.03) activation fee.
Kena 9.99 includes 100 GB of data on TIM’s 4G/LTE network plus unlimited calls and SMS for €9.99 (US $12.08) a month and is available to customers porting their number from Iliad and several other MVNOs. Finally, Kena 12.99 comes with 70 GB of data plus unlimited calls and SMS for €12.99 (US $15.71) a month for customers of all other operators.
This suite of plans is interesting in that the operator has decided that the attractive pricing, originally intended to be temporary for promotional purposes, will instead be permanent. This suggests several things.
One, that the operator can afford to offer the services long-term at the lower price point, although it expected not to do so. While Kena is a small budget-oriented operator, it is a sub-brand of a large operator, TIM, and as such has deep pockets. Two, that Kena perceived that it needed a stronger, more persuasive offer to lure enough subscribers away from rival budget operators, both virtual and non-virtual. And three, that the strategy of attracting customers with low-priced promotional offerings and then upselling them may not be working.
The logic of dramatically low-priced introductory offers is, of course, that new customers will be attracted and sign up, grow accustomed to the service and to the operator, and then accept the higher price when the introductory period ends. In this market, customers presumably have come to expect comparatively low prices for very large amounts of data and therefore will not be pleased when the price goes up or the allowances go down. Therefore, the better strategy for acquisition and especially retention is simply to abandon the pretense of promotion and just offer the tempting package long-term—or, so to speak, forever, if there can be such a thing in the ever-changing mobile marketplace.