Around 32 percent of Chilean prepaid and postpaid subscribers have no idea how much data they consume every month, according to a report conducted by mobile operator WOM.
The actual usage figures are as follows: 36 percent of postpaid customers use between 2 GB and 5 GB per month, and young people aged 18–24 are the heaviest users. In terms of monthly spend, 26 percent of the 18–24 demographic spend between CLP 20,000.00 (US $30.00) and CLP 30,000.00 (US $45.00) per month on data, and 18 percent of them spend more than CLP 30,000.00. Around 44 percent of the data use in this age range is for streaming services such as Netflix or YouTube.
Findings such as this one from Chile are, we think, very instructive for mobile operators designing plans. We often assume that customers and potential customers make rational decisions about their purchase of services, weighing their consumption habits against various pricing options. However, in many cases they are doing nothing of the sort, since they actually do not know how much data they consume, or how that data is apportioned.
While consumer ignorance could work to the MNOs’ advantage under certain circumstances—for example, by causing some users to pay for more data than they really need—in general we believe that it is in operators’ interest for customers to be well informed about their usage. With operators taking pains to craft packages with multiple options and price levels aimed at various user profiles, subscribers need to have accurate knowledge about their use of data (as well as voice minutes and SMS, for that matter) in order to make good decisions about which plans are right for them.
Therefore, operators need to take action. First, they should be conducting customer surveys to assess the level of awareness about service consumption. Then, if they identify a problem—as in Chile and in many other markets—they should implement new practices to remedy the situation.
One possible solution is simply clearer and more transparent billing to make it obvious to subscribers exactly what their consumption was in a given period and how much they paid per service. Beyond that, operators could set up procedures so that users are regularly informed about their usage levels, via text message or otherwise through their devices, at regular intervals and not just when top-ups are about to run out. Another approach is a voluntary subscription check; the operator 3 Denmark is currently offering this option, which it decided to do after an independent survey found that 54 percent of Danes did not know their mobile consumption levels. Of the customers who have agreed to the check, about 25 percent have actually changed their mobile plans.
We believe that an informed customer really is the best customer, and any campaign to raise awareness levels about usage would be a win-win proposition. Otherwise, many of the intricacies of plan design could end up being wasted effort.