Digitata’s Dynamic Voice Tariffing helps Africa’s mobile operators to sell unused capacity – data version could crack giving lower data prices
Africa’s mobile operators are running increasingly complex businesses with multiple revenue streams. It’s no longer possible to just focus on voice and everything else will take care of itself. Russell Southwood spoke to Tinus Neethling, CEO of Digitata about dynamic voice tariffing, the data version it’s developing and using mobile media.
Tinus Neethling has only just taken over as CEO of Digitata. Formerly he held the same position in Rorotika Technologies in which Digitata acquired a controlling stake in October this year.
The new consolidated company has four streams of activity: its dynamic tariffing business (for voice and SMS but shortly for data as well); its network business which offersm vendor agnostic, network management; its Insights stream focusing on mobile engagement and advertising strategies; and last but not least its innovation stream where it is incubating new products. Its products are used by most of the big mobile groups in Africa including MTN, Airtel and Econet as well as by operators in Latin America and increasingly in Asia.
Dynamic voice and SMS tariffing is offered by many African mobile operators under their own branding: for example, the MTN Zone product. Digitata has built an algorithm that can offer different tariffs for every hour of the day across every cell site. It takes unused capacity and prices it at a level that will attract users to make use of it rather than continue to fill peak times. For example, users might stay at home longer to take advantage of cheap tariffs rather than travel to their work destination that will have more expensive tariffs.
But its impact is felt beyond just selling unused capacity, it helps reduce customer churn, maximizes the yield per customer and means there are less people on the network at peak times when high value customers (who are less price sensitive) are on the network:”On some networks, the peak time used to be 8 am but now its 3 am in the morning…One operator was told by the regulator that it must cut its rates by 8% and (using dynamic tariffing) it made more money”.
Digitata is in the process of taking the same concepts into data pricing. Current data prices in the most competitive parts of Africa are now broadly comparable to US and European prices. But they need to be lower if a larger African data market is to develop because incomes are much lower. Dynamic data tariffing may be one route to actually giving much cheaper data prices outside of peak periods. As Neethling says:Data is still not affordable enough.” It is currently running a pilot and will roll out a full service shortly.
On its Insights stream, Neethling describes seeing this work as making Digitata a media company: “We can publish the discounts on cell broadcast and put a nice widget on a smartphone but it works on anything from my oldest Nokia to the newest smartphone. It’s like my bulletin board. Users will get into the habit of checking rates.”
On the media side, it offers the latest sports headlines, news and health tips with advertising alongside it:”There’s a large amount of inventory. Every call is an impression served. You engage with the consumers so if they see the headline Springboks last score, they hit * and a number and get the whole article.” The content is free to the customers.
Digitata has taken Roratika’s success with gamification to create new avenues for engagement:”We did a proof of concept with a bank. 100,000 people accessed it and the average time playing the financial literacy game was 38 minutes. In one country, the big movie houses ran a campaign and got 100,000 impressions with 10,000 engaged enough to ask about going to the movie.” It understands and uses the data supplied by consumers to give them what they’re looking for.
The network stream of the company manages the parameters of the network across the whole network. In the complex, multi-layered networks run by mobile operators, there may be as many as 1,000-1500 parameters per cell.
”These are all across multiple technologies and the problem has often become too complex to manage. We pull out all the configuration data and put it into a database where you can see it for example, per vendor and per base station…We did a trial in Greater London with one operator and found that in 5-10% of base stations HSPA had not been implemented. So it’s not just an African problem.”
“Often operators fail to switch on Edge and you can simply do this right across the network. In some cases, base stations are not defined both ways and this causes problems for users.” If operators are outsourcing their network management, they can use the tool to “play policeman” and see whether the vendors managing services are implementing agreed changes. Likewise, vendors have become customers and are buying a licence to manage their own equipment. It also lends itself to managing Self-Organised Networks (SON).
Because mobile operator networks have been modified so much, this kind of tool allows you to manage effectively the whole of your equipment estate and see it from a single dashboard.
For me, the biggest thing of interest is the dynamic data tariffing because it allows operators to do what they seem to fear most: explore customer price elasticity without completely destroying existing revenues. Through using it, it should be possible to find price points that will both draw in far greater numbers of users and allow them to use far more than the current paltry 100 MB averages. And hey guys, why not start offering dynamic data pricing on LTE? You really need to change the data market not just manage your high value customers.
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