Pakistani operator Ufone, part of the UAE-based Etisalat Group, has introduced UShow, an app that allows Ufone subscribers unlimited access to streaming movies and music. So far, it is available for Android (version 4.2 and above), through Google Play, though an iOS version may be offered in the future. Through the UShow app, Ufone customers are able to view a large selection of Hollywood, Bollywood and Pakistani films and listen to a library of music tracks of local and international interest. The lists will be refreshed frequently.
After subscribing through Ufone’s website and downloading the app, users will receive access to the content at a cost of PKR 8.00 (US $0.07) per day. The service is renewable every 24 hours. With a one-day membership, subscribers can consume unlimited content for no extra charge and are allowed 100 MB of data free of charge. After that threshold is reached, further data consumption will be billed at standard rates.
Special offers of online entertainment content are increasingly prevalent in the worldwide mobile market; this one from Ufone is interesting in several respects. For one thing, the content is proprietary rather than coming from a third-party provider. While many operators are co-branding with content providers such as Netflix or Spotify, Ufone is fully branding its entertainment offerings, having selected them itself. And tailoring the content to the specific tastes of its target demographic is, as always, a very strong strategy.
Furthermore, the operator has devised two ways to derive revenue from this offering. Although the content itself is free and unlimited, access comes only after a subscription fee is paid, and that fee, while it is quite low, must be paid daily, or on any day when the service is desired. Second and more important, there is a data cap on the usage, after which the subscriber will be charged at normal data rates. The cap is 100 MB, not a very large amount when it comes to streaming movies, in particular. Most users will surpass the limit, and therefore Ufone will derive revenue from the data consumption, unlike those operators that zero-rate all the data used by popular streaming services and apps. And, as we have observed on a number of occasions, data use breeds more data use, and by encouraging subscribers to watch movies and listen to music through UShow, Ufone will be helping to cultivate among those users the habit of using more data, which over time will drive even more revenue to the operator.
Finally, it is worthy of note that Ufone, the smallest of Pakistan’s four MNOs, has a 2G/3G-only network, whereas the others have upgraded to 4G/LTE. In a sense it is a bold move for Ufone to offer high-bandwidth services that could tax its network’s bandwidth, and customer satisfaction could possibly suffer. Nonetheless, 3G is adequate for movies and music, and therefore we think it is a valid competitive strategy for Ufone to offer its subscribers access to these appealing content features, especially considering that it positions itself as a budget operator and that its customers are keen to keep costs down while still enjoying sophisticated value-added benefits.