Carrier billing in MENA: 2018 market report by Fortumo

Carrier billing in MENA: 2018 market report by Fortumo

Fortumo's latest market report gives an overview of the mobile payments landscape of the Middle East and North Africa. It covers 10 countries where Fortumo has coverage. These markets are (by population): Egypt, Turkey, Algeria, Iraq, Morocco, Saudi Arabia, Tunisia, United Arab Emirates, Kuwait and Bahrain.

MENA stands out in the mobile ecosystem due to a combination of high smartphone ownership rates across all markets coupled with significant spending on digital content. As an example, median revenue per user from carrier billing in United Arab Emirates ($6.4) from September 2018 was higher than in Switzerland or Netherlands. Also the MENA region is believed to be the driver of 5G development, being amongst the first in the world to launch commercial 5G networks.

At the same time, card-based payments are out of reach for most people in the region, which means that adopting locally available payment methods is one of the key factors for succeeding in MENA. According to SuperDataResearch it is in fact carrier billing that merchants tap into when looking for additional ways to grow: the payment method represents 14.9% of all revenue generated by digital gaming in the region, only being behind bank-based payments and e-wallets.

Beside the varying access to payment methods, the countries in the region are extremely diverse, both in economic and cultural terms. The population is relatively young and but the GNI differs 14 times between the lowest and highest earners. The need for localized content is also evident since Arabic is the main language in at least half of the given countries. Another example of a regional singularity is the 43.2% rise in mobile purchases during Ramadan.

This market report aims to give merchants a better understanding of the region: what the local mobile landscape looks like, how to localize pricing to match user income, which payment methods to select in order to increase the amount of paying users and which devices to target.

Enter your contact details below and get access to the report immediately.

Emerging Markets Payment Index: Q3 2018

Emerging Markets Payment Index: Q3 2018

Here's our Emerging Markets Payment Index update for Q3. This report is intended to be used by digital media companies for benchmarking their revenue in markets with high smartphone growth and low credit card penetration.

The Emerging Markets Payment Index focuses on countries highlighted by GfK in its global forecast as the largest tech device growth markets. These countries are India, Nigeria, Pakistan, Vietnam, Brazil, Egypt, Indonesia and the Philippines.

These markets differ significantly from mature Western countries, where the current user base of most digital merchants is located. The main trends in the industry driven by these countries are:

  • Emerging regions drive new smartphone adoption, while sales in mature markets decline
  • Mobile data consumption in these regions is growing faster than in mature markets
  • Service quality on mobile needs to equal desktop, as emerging regions are mobile-only
  • Emerging markets have tipped web usage in favour of mobile devices

As a result, digital merchants who want to sustain their user base and revenue growth need to focus on these countries, but do so through a customized, localised approach to user acquisition, monetization and retention. The Emerging Markets Payment Index provides an overview data that merchants can use to account for of the individualities of these fastest growing mobile markets of the world.

The payment index aggregates data from all platforms (web, mobile web, feature phones, smartphones, smart TVs) and app stores connected to Fortumo’s carrier billing platform.

Should you have any questions about the report, please get in touch with us at bd@fortumo.com.

Raccoon attacks and bad weather: 5 disruptions to the telco industry around the world

5 disruptions to the telco industry around the world

Every other article about the telco industry today speaks about the game-changing digitization and all the challenges and opportunities that come with it. However, on the positive note the telcos should probably be used to the state of certain uncertainty, because all sorts of market disruptions have been their companions from the beginning of (telco industry) time. Here are some examples of telecommunication industry disruptions that have literally come from the sky or even from the bushes. Of course we hope nothing of this sort ever happens to our partners (and all furry animals are also left unharmed).

1. Price war in India

5 countries

In 2017, Reliance Industries' Jio triggered a brutal price war in Indian telecom sector, offering free data and calls to its subscribers. This has brought along a 33% fall in consumer spends and is becoming a heyday for the subscribers and a nightmare for the other telcos.

By some sources the current revenues can barely cover operational costs, sparking rumors about the other operators being on the verge of bankruptcy. It has also brought on a rapid wave of consolidation, leaving three major players on the market.

2. Hurricane Maria in Puerto Rico

5 countries

In September 2017, the category 5 storm Hurricane Maria hit Puerto Rico, leaving 95% of its cell towers out of service. The situation was dragged on by electricity outages and fuel shortages.

The lack of cell service hindered the necessary logistics for helping people in need, also the people couldn’t contact their loved-ones or the outside world. 25% of the population was still without service more than a month later.

Since people are more and more reliant on mobile phones, maintaining cell service during natural disasters is becoming increasingly critical. For example, AT&T tested placing portable cell towers on drones as a temporary solution.

3. Energy crisis in Nigeria

5 countries

Even though Nigeria is Africa’s largest economy and also largest oil producer, it has to import refined petroleum products due to a lack of local refineries. The country is also not able to generate sufficient amount of power.

The constant energy crises is burning a hole in the pockets of telcos, who have to power their own services with fuel generators. In 2015, telecommunications in Nigeria were almost shut down due to the fuel crisis.

4. Drug cartels’ private networks in Mexico

5 countries

This mobile network might not be open to the general public, but it’s an industry nevertheless. The Mexican and US government have been engaged in a war on drugs for decades, including busts on cartels’ private mobile networks.

Over the years there have been a myriad of news about the private communications networks the gangs build and use. The authorities have broken up extensive networks that stretch 500 miles along the border and another 500 miles in Mexico’s interior.

But it seems like battling the 100 headed dragon, because the equipment is hidden in remote locations and connected to solar power. The cartels kidnap and enslave engineers to help them build and maintain those networks. Just this year a Canadian CEO was arrested for supplying extra safe encrypted phones to Mexican cartels.

5. Raccoons attack in four states of Southeast USA

5 countries

Depicted raccoon was (probably) not harmed in the incident

In 2015 a massive cell phone outage hit four states of Southeast USA - parts of Kentucky, Tennessee, Alabama and Georgia were left without service. The reason was believed to be vandalism or a raccoon (or why not both - a vandalist raccoon).

As a matter of fact, big portion of different infrastructure issues are brought on by animal attacks. Squirrels have probably caused way more power outages than cyber-criminals. Even underwater is not safe - sharks nibble on transoceanic fibre cables, as they are probably attracted to the electromagnetic fields.

Building a digital service storefront: it's simpler than it sounds

Building a digital service storefront: it's simpler than it sounds

The role of telcos is changing: from selling telecommunications devices and services to being a channel of digital entertainment for their subscribers. This means that for customers, subscribing to Spotify or Netflix should be as simple as recharging their SIM card or buying a new phone.

Opening up almost any telco homepage gives you options to easily buy the card or phone, but not digital services. 3rd party offerings are usually kept hidden under separate “Deals & Offers” or “Entertainment” categories. Every additional step it takes for to reach the activation window means a growing number of subscribers never reaching it.

For telco digital teams, this can be frustrating. The integration is complete, the partnership is launched but subscribers are not activating the service. Furthermore, with several different partnerships in place, the subscriber has no simple way of viewing all of them and deciding which one they want to purchase.

The solution is a digital storefront. This digital storefront should consolidate information on all available bundled and reselling services, enable subscribers to quickly get an overview of their features and activate them on the spot. A growing amount of telcos (such as Globe, Indosat and Singtel) have such solutions available. But what should those who don’t yet have such a storefront available keep in mind when building it?

What to avoid before you start?

When mapping out feature requests for a digital storefront, things can escalate quickly. Contextual recommendations, automated discounts based on business intelligence and scalable partner onboarding sound like great features in theory. As a result, the expected storefront RFP becomes bloated and will include many features that will go underused.

For example, even the biggest telcos usually don’t have more than 3-5 partnerships in each major content category: music, video, gaming, sports, security, kids. If all the offers available to the subscriber can be viewed on one page, does it make sense to invest in creating a contextual recommendation engine that accounts for the subscriber’s profile and past spending? Probably not.

Most third party partnerships need to be configured only once. If the deal content changes, for example with a follow-up campaign, these changes usually require minor tweaks. Instead of building a complex and expensive product right off the bat, the digital storefront should have an MVP approach.

This leaves the door also open for when future digital partnerships are different from existing ones. Most major digital service providers have their own user eligibility and activation logic and API-s, so developing too many complex features can instead limit integration capabilities with these providers.

Digital storefront: discovery, authentication and payments

Creating a great digital storefront for mobile subscribers requires the following:

  • Easy findability of the storefront and simple navigation between offers in the storefront
  • Seamless UX for subscriber authentication and eligibility validation
  • Simple transition to paying for the service

For promoting the storefront itself, many of the same tactics can be used as for individual bundle campaign promotions. Features of the storefront for discoverability should include:

  • Services consolidated into categories: music, video, games, security, sports and kids
  • Dedicated pages for each service: value proposition, features, pricing and FAQ-s
  • Capability for the subscriber to activate the service directly from the offer page
  • Responsive design that works well for both desktop and mobile users
  • Analytics solution for evaluating the conversion funnel of subscribers

There also needs to be a mechanism to identify the user. Identification can be done through:

  • Another service (e.g. if the user is already logged in to the self-service portal, their identity can be used for the storefront)
  • Header enrichment on mobile devices
  • Broadband account, if the user is on their home network
  • SMS PIN-code based authentication
  • MO SMS/USSD based authentication
  • OAuth or GSMA Mobile Connect based services

Finally, while most third party offers include a fixed discount period for the service, the goal is to get the user to convert to a paying customer. The consent for charging can be acquired when the user is identified and either charged directly to their (mobile or broadband) invoice or alternatively, direct carrier billing can be used. In order to motivate the customer to buy the service through telco channels, an additional incentive can be provided, such as an extended trial or a discount.

The portfolio of services should be periodically reviewed and new categories included. While today streaming services are still the main bundle partners for telcos, it’s worth evaluating all services that are consumed through smartphones. These could include productivity tools (Office365 or DropBox subscriptions), communication apps (Viber or WhatsApp credits) and transportation (Uber or Taxify credits).

In summary…

When OTT partnerships are already launched, the goal is to maximize the value from the work already done. Creating a digital storefront that is easily accessible through the telco website means customers become more aware of the offers available to them, and thus more likely to purchase them. For bundle and reselling integrations done through Fortumo’s Trident bundling platform, the authentication, eligibility and payments part is already solved which means all the services can be directly plugged into the storefront.

Do you remember September?

What happened in the digital industry in July?

October has kicked off and time to summarize the biggest stories from the digital ecosystem.

Beside the articles below that caught our attention, make sure to also check out our Asia and India market reports, as well as the Emerging Markets Payment Index for Q2.

General mobile

Payments

E-commerce

Digital content

Gaming

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