Monday, 15 May 2017

SIM Reactivation in a Competitive Landscape: Reconnecting Dormant SIM Cards @Gemalto

Hi Guys, 
The last decade has seen technology continue to rapidly influence consumer habits and with that mobile operators have been introducing an ever growing array of mobile services and offerings to expand their customer base – all the while trying to retain existing clients. To this end, consumers continue to embrace the digital age and they are rapidly seeking ways to expand their mobile experiences and capabilities.

Many operators in emerging countries suffer from high volumes of dormant SIM cards, particularly in prepaid markets as cost-conscious users juggle with SIM cards to take advantage of the best offer of the moment. They switch operators opportunistically and tend to own several SIM – many of which become inactive and stop generating revenue.

The multi-SIM phenomenon is among the latest trends that consumers – particularly amongst the newer and more emerging markets – are taking advantage of, allowing them to switch carriers on the fly with the simple switch of a SIM card. In addition, the development of affordable multi-SIM devices has encouraged the multi-SIM phenomenon, particularly in Africa and Asia. However, it is when you look at the extreme trends in specific countries that it becomes clear that this is not a blanket phenomenon. Globally, the multiple SIM phenomenon remains high. This is particularly true for prepaid markets such as Nigeria, Kenya and Ivory Coast which are all above 96% prepaid penetration. South Africa is at 88%.
SIM Reactivation in a Competitive Landscape: Reconnecting Dormant SIM Cards @Gemalto
These numbers are showing that instead of just carrying one SIM, many mobile users switch between providers to capitalize on varying price, data and service offers from industry operators. What we are seeing is that the value proposition of buying a new SIM for consumers is stronger than getting a recharge by the same operator, resulting in rotational churn.

This practice has inadvertently intensified the already fierce competition, forcing providers to offer attractive call rates or tariff plans for both voice calls and data services. Each operator’s goal is to discourage users from switching to another operator for specific needs by making sure its offers are the best.

So, if the multi-SIM phenomenon isn’t the practical option, then what is? In mobile prepaid markets, re-engaging with multi-SIM users has revealed to be complex and expensive. With increased competition and on-going risks of disintermediation, mobile operators increasingly need to re-establish trustful ties with lost users. This can be achieved through a number of tactics including: selling new SIM cards to churned users; targeting dormant users with win back promotions; reactivating the SIM at IT-equipped retail stores and instantly reactivating the SIM anywhere, anytime, with SIM Reactivation.

But what if there was no need for consumers to carry multiple SIM cards, where those decommissioned SIMs could be used to win customers back to a network? The answer is found in the 2016 study carried out by Gemalto and global market research giant, Kantar TNS in the Ivory Coast which revealed a strong consumer appetite for re-using dormant cards.

The study showed that 84% of subscribers would reactivate old SIM, given suitable incentives such as free call time (41%) or free data (29%). Furthermore, the number of subscribers that would keep hold of a disused SIM leaped from one in six to five in six, if the operator supports real-time self-care reactivation.

When we lay it all out in black and white, the tactic optimally designed for re-establishing said trustful ties lies in instant reactivation.Operators can truly implement efficient customer reacquisition strategies by easily re-engaging with dormant SIM users. Gemalto’s SIM reactivation detects and reactivates inactive users connecting to the mobile network, allowing operators to reacquire subscribers at a reduced cost and turn them back into valuable users. Returning users can conveniently reuse their expired SIM card anytime, anywhere; select their phone number and new personalized services. It is a customer-centric solution that offers convenience to subscribers and improves the customer journey dramatically.

While it seems as though consumers are in a winning position, the benefits for operators can in no way be ignored. Mobile operators increasingly admit that more than 50% of the point of sales workload is prepaid SIM card renewal for returning users. Hence sales people spend their time repeating the full enrolment process as for new customers. They can't fully focus on promoting new offers in line with the operator commercial strategy. Rejoining user on-boarding represents an unnecessary cost (time, new SIM), reduces opportunities for additional revenue, and negatively hits the retailers' profitability.

For MNO’s, SIM reactivation reduces the pressure on busy sales outlets, it helps operators focus their efforts on profitable commercial actions in their retail stores. It massively reduces subscriber reacquisition costs as operators can stop buying SIM cards for returning users and extends the SIM lifecycle. When we look at the bigger picture, there’s plenty to gain and nothing to lose for both parties.

From a local perspective, a key consideration to SIM reactivation relates to the already existing formal process which South Africa has in place – the Regulation of Interception of Communications and Provision of Communication-Related Information Act, commonly referred to as RICA. Gemalto’s reactivation solution will not displace or mirror the current RICA process. Instead, it will be deployed within an operators existing business model so that its benefits are fully realized within the existing legislation.

In conclusion, the phenomenon of carrying multiple SIM cards is a false economy. It’s inconvenient and impractical especially when there are solutions readily available to ensure that you your mobile experience is nothing short of convenient, less hassle and enjoyable. And isn’t that the point after all?

By: Remy Muscat, Global business development, IoT Services & Activations at Gemalto
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