Peru’s Bitel Launches Undergraduate Prepaid Plan

Peru’s Bitel Launches Undergraduate Prepaid Plan

Peruvian mobile operator Bitel has launched a prepaid plan targeted at undergraduates and graduate students studying at the country’s universities and other educational institutions. The new plan, dubbed Univ, is available to anyone with a student ID card, regardless of age, and comes with 300 MB of data, unlimited on-net calls and zero-rated access to Wikipedia, Facebook and WhatsApp for PEN 15 (US $4.50) per month. Bitel, the Peruvian operation of Vietnamese state-run operator Viettel, has grown its share of the market to around 3.5 percent since launching in 2014 and expects to have 2.5 million customers by the end of this year.

Tarifica’s Take

The youth demographic is highly coveted by mobile operators, and for very good reasons. While young people have relatively little disposable income, they tend to be heavy consumers of mobile services, especially data, and are willing to spend a large percentage of their disposable income on such services. Furthermore, young adulthood is a time when people adopt brand loyalties, so capturing a young consumer can mean acquiring a lifelong customer. In addition, in terms of population numbers, the youth demographic is a very fast-growing one, especially in certain countries.

To appeal to youths, mobile operators have various strategies at their disposal. Some of these involve branding and marketing efforts that can be complex and delicate, involving not only the need to understand the unique cultural traits of young people but also the need to make sure that youth marketing efforts do not end up alienating older customers or otherwise diluting the brand. One comparatively easy, straightforward and risk-free way to gain youth customers is to market plans to university students. While not all such students are young, most are, and arrival at university is a time when people are particularly in need of setting up new mobile service. Bitel is savvy to take this approach in Peru and make this Univ plan available only to students. The exclusivity of the offer makes it more attractive, and its prepaid basis is particularly appropriate for those on a budget. The known reluctance of youth to be tied down to long-term commitments also argues in favor of the offer being prepaid.

Finally, although 300 MB per month at a low price is very generous indeed, the long-term payoff in terms of loyal customers can make it well worth it for the operator. Getting new customers used to using large amounts of data has the effect of increasing their data spend over time. Zero-rating popular apps and services, as Bitel is doing here, also serves to mold data-use habits. We are not surprised to see such a strategy in use by a subsidiary of Viettel, a company well known for its bold international gambits and for its willingness to spend money now in order to make money down the road.