Over the last 12 months, new growth markets in South Asia, Africa and Latin America are registering over 50% year on year increase in customer acquisitions. India’s wireless market, for example, is growing at an approximate rate of 5 million customers per month. As operators move into untapped rural areas to take advantage of low penetration rates, prepaid subscriptions from low-income, value-driven, cost-sensitive customers will fuel the significant bulk of growth.

The demographic and credit profile of fist-time entry-level users are certainly different from that of the more affluent subscriber segments. Three elements affect the spending decisions of the entry-level users: fit purchase into their cash flow; affordability, and access. To profitably grow this segment, telecom service providers need to embrace a business model that simultaneously focuses on maximized use of existing network assets, reducing operational expenses via streamlined, cost efficient processes, as well as launch and drive adoption of relevant added- value services to curb migration.

Operators can leverage Unstructured Supplementary Services Data (USSD), a data bearer pre-built into the GSM network, to launch a cost-efficient portfolio of applications that enhance operational efficiency and generate incremental revenues by delivering practical value to the prepaid customer dynamic.

USSD benefits for entry level markets

USSD is an attractive technology for rapidly developing markets, where the majority of the population fall into the low-income bracket and do not yet belong to the mobile subscriber base. It can provide a wealth of applications including Micro-Finance, Money Remittance Services, Validity Extension, Talk Time Extension, Flexi-Prepaid and CallBack.

Operator Benefits

Improving Operational Efficiency

New subscribers in developing countries are likely to bring less ARPU than existing ones. Prepaid distribution and customer care costs are key cost components, which can escalate operational overheads. USSD-based solutions can help operators balance the trade-off involved in keeping service levels high and costs low.

Reduce Cost Per Transaction

USSD based Prepaid Reload enables operators to vend prepaid vouchers in electronic form over physical and virtual channels. Operators can distribute talk time to distributors and retailers over the air using USSD. The retailer in turn credits airtime to the customer account.

Operators can bypass the conventional dealer network and further extend outreach via an embedded and scalable peer-to-peer distribution network. Mobile users can use USSD to transfer airtime credits to another prepaid user’s mobile account, effectively rendering each customer a potential service reseller.

Lower Customer Care costs

Operators can deploy a USSD based self-care portal with a personalised, text-based menu to access a range of account-related tasks such as balance enquiry, refill account, or self-provisioning VAS. USSD’s session-based architecture accelerates response times and ensures quality of customer interactions.

Lower marketing costs

Operators can also use USSD as a cost effective way of maintaining contact with prepaid subscribers, alerting them to new services with the “push” capabilities of the technology. Operators can use the unused character space in the balance enquiry response to deliver targeted marketing messages to prepaid customers in order to cross-sell and up sell services.

Summary

Although USSD is a mature technology, operators and subscribers have not exploited its capabilities and benefits. With an aggressive drive to push telephony among low-income users in emerging and rapidly developing markets, USSD can help operators render a host of useful services and ensure each incremental subscriber benefits from a positive service experience.

Sanjiv Mittal is CEO, Bharti Telesoft