The Moment Minutes Turn Into Data – Smile launches VoLTE voice tariff based on data charges

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When they write the history of Africa’s transition to everything becoming data, Smile’s announcement of its voice tariffs on VoLTE may well be the point at which voice really began to change, Russell Southwood spoke to Alero Ladipo, Head, Marketing, Smile last week in Lagos.

Smile has been piloting VoLTE and launched in Nigeria to its existing subscribers in February this year and the public launch was two weeks ago:”We wanted to ensure the business was good. 10% of our base (existing subscribers) have made several calls trying it out.” Smile will not give out subscriber data but it is believed to have over 100,000 subscribers. “People are using it like a regular phone and some are spending 30 minutes or more a week using it. There have been no cut-offs or dropped calls.”

The mechanics of using the service are simpler than you might expect. You can either get a SIM or use an app on a smartphone. The VoLTE SIM which costs nothing gives you a number and will go in any LTE handset. The SIM is sold with either 5GB or 600GB of data so it is not a low-end market offer.

However, there are not a lot of LTE handsets in the Nigerian market at present. But Samsung is bringing its T-series on to the market for between N45,000-65,000. And TECNO has a top of the range dual-SIM handset that can run 4G and operate as its own hot-spot. :”When there’s more handsets, it will become more usable.”

Alternatively, you can use an app on any iOS or Android phone and this will also generate a Smile 0702 number. Again the app is free to download. The service on SIM or app offers both plain voice calling and video calling. The app will allow you to make calls either directly within the VoLTE coverage area or via a WiFi hot-spot.

Both services are reported to be extremely clear compared to the rather muddy clarity of the big mobile operators. The service has interconnection agreements with MTN, Glo and Eitisalat. It also offers international calling at rates that are “still one of the cheapest. But it has been mainly domestic calls so far.”

Coverage is currently in Lagos, Ibadan, Benin, Port Harcourt, Onitsha, Asoba, Kaduna and Abuja. Use levels follow national patterns with most use in the “golden triangle” cities of Lagos, Abuja and Port Harcourt followed by Ibadan, Benin and Onitsha:”We think there’s a lot of potential in Kaduna, the commercial capital of the north.”

But won’t the network simply get congested and be like all the others?:”There’s been some congestion issues in the high-end areas but being in 800 MHz means we can decongest quickly. We can load on another base station.”

The really interesting part of the service is how it is charged. The minutes and SMS’s used are converted transparently into data for charging purposes. So 1 minute equals 6 mb and an SMS equals 2 mb. The bigger the data bundle you buy, the cheaper you get your minutes and SMS’s. So the cost per minute is between N4-7.8 per minute.

Smile launched its VoLTE service in Tanzania and Uganda a day after Nigeria:”The launch was very PR-based. Traction has been good and they’re building on that traction.”

“People have been asking a lot of questions because it’s all very new. We’re dealing with that and we need to educate people more about the service. The consumption and quality of the data with LTE is not what they’re used to.” As a result, many people say that their data goes more quickly:”It’s the same thing with voice.”

The successor company to Nitel, Natcoms has just started its own VoLTE pilot so I asked whether this might provide early competition?:”We started before Natcoms and we’re ahead of them in a number of ways. But more competition will increase awareness of the topic (VoLTE). Also they’re on much less good frequencies than we are.”

On the data side of the business, it has introduced an unlimited data package (N19,800 for 30 days)  in December 2015:”This has been something Nigerians have wanted and we’ve been tweaking things to meet their needs. We have a fair use policy but there have been ‘data guzzlers’”. One customer was using it to do live broadcasting from festival events around Lagos. But overall these customers “prefer predictability and not running out unexpectedly.”

With the arrival of Netflix, there’s also been a lot of interest in the streaming of home entertainment. So Smile has introduced a static LTE service aimed at TV or iPad use in the home:”We’ve seen people moving from using social media a lot to streaming and video services.” In effect, Smile is now offering the equivalent of a Triple Play service (Voice, data and video) without giving it that name.

But will Smile remain a service just aimed at high-end market users?:”As the size starts to increase and with more competition, we will have to shift pricing to address the 60% below 30 years of age. It would be foolhardy not to offer something to the youth as they are tomorrow’s middle class. We’re working on packages for universities. These will be reasonably priced both during the day and night. We won’t just be an elite offering. Everybody in the community deserves good data.”

Smile is still a niche player but it has moved from a few thousand subscribers to a much larger number. MTN and Glo’s spectrum purchases from NBC will keep both of them tied up in knots for some time ahead. So maybe there is a gap that will allow a network that was built only with data in mind to establish a beachhead.

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