Prepaid Mobile Landscape in Emerging Markets: The Rise of Individualized and Shifting Offers
by Will Watts
In emerging markets, prepaid mobile plans dominate the telecommunications landscape. This is largely because limited access to banking services and insufficient credit information make postpaid models less viable. Although this structure poses challenges, it has also spurred innovation. Unlike mature markets with fixed-fee models, these economies operate in a dynamic ecosystem where offers are continuously adjusted to target specific user behaviors and network demands.
This edition of Tarifica’s Data Dive examines the nuances of prepaid mobile ecosystems in emerging markets, explores how individualized and shifting offers have redefined competition, and highlights insights gained via use of Tarifica’s PlanDetector software.
Background
The Prepaid Advantage and its Challenges
In many developing economies, the reliance on prepaid mobile plans has affected how operators engage with consumers. Traditionally, users purchase credits from local stores, load them onto their phones, and select plans via USSD menus.
However, operators have increasingly adopted proactive strategies, sending special promotions and short-term offers directly to consumers via SMS. This evolution has enabled operators to:
- Develop and target promotions based on user behavior: By analyzing usage and spending patterns, operators can craft offers tailored to any type of consumer. For example, they can develop premium packages for high-spending users and send low-cost deals to budget-conscious customers.
- Optimize network utilization: Short-term offers can drive traffic to underutilized areas while charging premium rates in congested zones, mimicking an Uber-style demand-based pricing model.
While this model is exciting, it introduces a critical challenge: competitive visibility. By sending offers privately to consumers, operators miss out on insight into rivals’ offers, creating a blind spot in strategic positioning.
PlanDetector
To address this gap, Tarifica developed PlanDetector, a software solution that tracks competitor offers by simulating various usage patterns on smartphones loaded into the application. We will be highlighting in this month’s Data Dive the valuable insights into operator strategies revealed during the first four months following its deployment by a client in an emerging market.
Methodology
The software tracked promotions from a single operator using three user profiles:
- Data Streamer: A high-data consumer frequently streaming videos and reloading credits.
- Regular Recharger: A moderate user purchasing small amounts of data credit weekly.
- Dormant User: An inactive profile connected to the network but not purchasing credits.
Key Findings
- Promotional Volume: Over this four-month period, 351 SMS offers were sent, averaging nearly one offer (0.98) per profile per day.
- Targeting Trends
- The Data Streamer received the most offers (1.3/day), underscoring the operator’s focus on high-value users.
- The Dormant User was the second most targeted profile, receiving over one offer per day. While this might seem surprising at first, it becomes logical when viewed as an effort to entice inactive users to re-engage with the service.
- The Regular Recharger received the fewest offers (0.6/day), suggesting that there were fewer deals developed for these moderate spenders.
- Offer Diversity
- While many promotions were repeated across profiles (e.g., a short-term data package sent 16 times in four months), 110 offers (30%) were unique to specific user types.
Future Plans
The client intends to expand the deployment of PlanDetector onto more devices across multiple regions in the country. This will provide a deeper understanding of offer targeting, including local variations and long-term trends.
Implications
Opportunities and Risks for Operators
Prepaid markets in emerging economies demonstrate high levels of innovation in telecom plan design, leveraging mobile-first dynamics to capture value across the entire ecosystem. However, this presents both opportunities and risks:
- Opportunities:
- Enhanced customer targeting allows operators to optimize revenue and tailor services to specific user needs.
- Dynamic pricing models can help operators maximize returns on network investments.
- Risks:
- Competitive blind spots may lead to underpricing or missed opportunities in key segments.
- The inability to monitor rivals’ strategies can erode market share and profitability.
The Need for Competitive Visibility
In this landscape, tools like PlanDetector are essential. By enabling operators to track competitors’ promotions and strategies, these solutions empower carriers to maintain competitive parity and make data-driven decisions.
Conclusion
In turning an apparent weakness – a customer base that lacks reliable digital credit – into a strength – compelling customized offers – mobile operators in emerging markets have once again demonstrated their innovativeness. However, the very strengths of this model—individualized, shifting offers—also create vulnerabilities in competitive positioning. To thrive in this environment, mobile operators must adopt tools that provide actionable insights into their competitors’ strategies, ensuring they remain agile and well-prepared in the ongoing battle for customer loyalty.
Tarifica’s PlanDetector offers a compelling solution for operators seeking to navigate this complex and rapidly evolving market.
About the Author:
Will Watts
VP of Product
wwatts@tarifica.com
Will is responsible for the planning, build-out, and maintenance of Tarifica’s data solutions, including the flagship Digital Intelligence Platforms. In his more than 10 years at Tarifica, he has successfully delivered custom projects and market analyses to clients such as GSMA, the World Bank, BEREC, Verizon and Telefonica.
For questions or comments about this analysis, please contact Penny Wiesman at pwiesman@tarifica.com