Home Africa and the Middle EastAfrica and the Middle East 2010 SIM card marketing – a competitive edge

SIM card marketing – a competitive edge

by david.nunes
Stuart CochranIssue:2010
Article no.:10
Topic:SIM card marketing – a competitive edge
Author:Stuart Cochran
Organisation:Evolving Systems
PDF size:163KB

About author

Stuart Cochran, Chief Technology Officer, Evolving Systems; he is responsible for global product management and development and directs innovation and technology strategy. Mr Cochrane joined Evolving Systems as a non-executive vice president of the Activation Market Unit when the company acquired Tertio Telecoms Limited, a UK-based supplier of activation and mediation software to communications service providers. Mr Cochran later assumed responsibility for the company’s Mediation Market Unit and was subsequently promoted to chief technology officer. Mr Cochran held a number of posts including Director of Product Strategy and Management and Director of Product Management, Development and Marketing. Stuart Cochran earned a Masters (MSc) degree in Computing and Computer Modelling of Optoelectronic Devices and Systems and an honours (BSc) degree in theoretical physics from University of Newcastle.

Article abstract

Operators often flood the market with cheap or free SIM cards and free credits to capture new customers and win market share. Since mobile phone numbers must be allocated in advance to each SIM, distributing great quantities of SIM cards wastes much of the operator’s limited number of mobile telephone numbers as a large percentage are never used. Dynamic SIM Allocation (DSA) resolves this problem; it lets operators defer the allocation of mobile numbers until the new SIM card is first used.

Full Article

Resisting the worst ravages of the global economic downturn, the mobile communications sector has continued to grow and prosper over recent years. The progress of broadband penetration, smartphones and connected devices, and cloud-based services has further intensified rivalries among communications service providers (CSP). Rather than sitting on lucrative monopolies, most operators today are battling a broad range of competitors head-to-head. Services, applications and product bundles are all developing rapidly as network operators fight to maintain their existing customer base and to recruit and retain new customers. As a result, operators often seek to differentiate in any way they can, constantly launching new services, handsets, rate plans and other marketing incentives to gain additional subscribers and to lure new business opportunities away from the competition. However, most operators today have structural or process issues that make these initiatives difficult to achieve. Fortunately, a new approach has emerged, based around a technology known as Dynamic SIM Allocation (DSA), which both enables operators to run new marketing initiatives cost-effectively and remove barriers to their timely implementation. Scoping the initiatives Marketing initiatives fall into two main categories: those that support new distribution models and those that promote new devices, services or applications. A novel approach to the former can seek to use customers as an extension of the company’s own marketing team or sales force. Operators are increasingly making SIM-only offers, either online or in magazines and offering free cards to users prepared to sign up to specific product packages. Often, network operators give away multiple prepaid SIM cards to prospects in the expectation they will keep one and pass the remainder on to friends and family. In the future, they might also offer free credit to users every time someone they have introduced to the service uses the card or tops up their account. Mobile broadband is a prime example of a new service that is growing rapidly – with laptops or netbooks as the devices of choice, using 3G technology embedded either in the device itself or in a USB dongle. Another service, likely to be driven by regulation in the future, is exemplified by eCall, a European Commission project intended to bring rapid assistance to motorists involved in a collision anywhere in the European Union. The project aims to employ a hardware black box installed in vehicles that will wirelessly send airbag deployment and impact sensor information, as well as automatically alerting emergency services and providing them with location details. The scale of the challenge In a highly competitive marketplace, the successful rollout of these types of initiatives is critical as operators battle to achieve an edge over their rivals. Unfortunately, their ability to deliver such programmes in a timely and cost-effective manner is often limited. The key issue is that most such schemes call for greatly increased distribution of SIM cards. In fact, the ultimate aim of these initiatives, which are often spearheaded by operator marketing departments, is to flood the market with cheap or free SIM cards in order to try and win market share. This presents a range of logistical challenges. Current processes for distributing prepaid SIMs involve pre-provisioning of critical resources. Not only must mobile phone numbers (Mobile Station International Subscriber Directory Number – MSISDN) be allocated to each SIM, but multiple entries must also be made in network databases. The databases involved have finite capacity. This fact in itself often place operators’ plans in jeopardy. It is very difficult, almost impossible, for example, to distribute 500,000 SIM cards packaged for a specific marketing campaign or promotion when there is insufficient capacity to provision these in advance in the network. New initiatives, therefore, can have a significant cost in terms of the capacity they use. They are also likely to require investment in additional systems to accommodate entries for SIM cards that, although distributed to potential customers, are never used. The proportion of give-away cards subsequently topped up is typically small, for example. Operators need to carry out some hard cost benefit calculations here to work out whether the necessary investment makes economic sense. If the expected take-up of such a promotion is 50 per cent, for example, there may be no business case for investing in the required capacity. There are also issues with the numbers themselves. In many markets, MSISDNs either are in short supply or are, at the very least, closely regulated. Sometimes, operators are even forced to delay new subscriptions because they have literally run out of available phone numbers. The problem stems from the link between unused SIM cards and wasted telephone numbers. Every unused, pre-provisioned SIM card on the network means an unused MSISDN. National regulators and their numbering authorities, in particular, are naturally eager to limit this because unnecessary MSISDN wastage not only adds an administrative burden; it also rapidly depletes stocks of available numbers. As a result, regulators have now started to impose conditions on the network operator community before they release new numbers. Some regulators have set minimum utilisation rates, with operators forced to report on their record of managing number ranges efficiently before releasing additional ranges. Others have gone one step further and started to charge for numbers. As a result, allocating new MSISDN ranges is often a prohibitively expensive process for operators. Coupled with this, difficulty or delays in obtaining MSISDN ranges can hold-up or even prevent SIM orders needed to support marketing campaigns from taking place. Scoping out a new approach So what is the solution to these apparently intractable problems? What operators need is a fully integrated approach to significantly increasing the volumes of SIM card distributions, without having to allocate these critical resources in advance. By achieving this, they would not only significantly reduce the cost of conducting such promotional campaigns but they would also allow themselves to be more agile, enabling them to experiment with new ideas and concepts and giving themselves a better chance of increasing pick-up and growing the customer base. The challenge they face is that with current technology a SIM that is not pre-provisioned cannot connect to the network; anyone trying to use such a SIM card would get an error message on their device. The new Dynamic SIM Allocation (DSA) approach resolves this issue by allowing operators to defer the allocation of both network database entries and MSISDNs until the new SIM card is first used. The key to DSA lies in innovative new technology, capable of building a key link in the network by supporting interaction between the new SIM card and the systems provisioning the network resources, even though the SIM card itself remains unable to connect to the network in the conventional sense. With the help of DSA, the operator can even determine the type of device in use or interact directly with the end-user via that device to ensure that the appropriate set of services, options and personalisations are applied. With the emergence of DSA, and its ability to defer the allocation of network resources until the time of first use, operators can now deliver the cost-effective and timely marketing campaigns they need to stay ahead of growing competition and drive significant revenue growth. Their search for a compelling solution to their ongoing marketing challenges may finally be at an end.

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