Sponsored Data: How Free Data Will Drive Increased Revenues For Operators

The zero rated data connection is happening faster than expected. The first wave of zero rated data took place when Mobile Network Operators (MNOs) provided ‘free’ connection to their selected sites, namely their content stores and service portals, where bytes consumed to browse the content and to conduct transactions were excluded from the users’ monthly data charges. The logic to this is obvious. Free connection is necessary to boost user visits and enhance online customer engagement at selected sites. The content stores offer premium, payable content whose take-up increases with more time spent browsing the store, while service portals save the MNO the costs of managing customer transactions and attending to their requests and issues while at the same time, offering an efficient channel to upsell the MNO’s services.

The zero rated data then started showing up on more innovative data plans that grew in tandem with the popularity of social networking sites, such as Twitter and Facebook. MNOs began offering packages that gave away free quota on these applications in their bid to capture and increase their market share. In this phase, MNOs collaborated with application and content providers to facilitate the delivery of the zero rated content (for example, sharing the information of the originating content servers) and in some cases, to host the content delivery network within the MNOs’ data centres, which proved to benefit the MNOs significantly in terms of reducing their internet connection costs. The application providers enjoyed increased traffic and usage of their applications while MNOs retained and expanded their subscriber base, especially among the digital natives and those who are becoming increasingly dependent on mobile data and social media networks.

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