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Competition has never been tougher in the mobile and fixed broadband sectors in Asia-Pacific. The major theme for communications service providers has shifted from “how do I make incremental revenues?” to “how do I survive the competitive threat?” That competitive threat could come either from a new MNO challenger to the market or from an existing disrupter playing hardball.

Some Asian markets are in a worse state of competition than others. Indonesian competition is chaotic. Back from a recent trip to Jakarta, a local operator source told me that of the 40–50 million SIM cards bought every month, 85% are “throwaways.” Forget what tariff rates you see advertised on operator websites, on the ground there is a completely different game unfolding. Prepaid users buy very cheap SIMs, use the voice and data, and then dispose of them. There is a segment of users that has a main SIM and uses throwaways, and there is also a throwaway-only user base. The government is enforcing SIM card registration, starting on May 1, for public security reasons. The positive thinkers hope that after inactive users are cleaned up post-registration, operators might be able to increase mobile data prices so that the throwaway market can shrink.

Meanwhile, Thailand is surfacing as a bright spot for emerging Asia as operators focus on customer retention and away from prepaid SIM card swapping. DTAC, for instance, has a 75% prepaid subscriber base, but half of its revenues come from postpaid. Its prepaid subscriber share has fallen from 86% in March 2015, to 75% in December 2017. AIS and True Move also have more than 40% postpaid revenue.

Other markets are also more concerned about competition. Recently, operators from Taiwan asked about how to retain high-value customers, while operators in Australia brace for a new competitor, TPG, which is giving away free mobile for six months (TPG is adopting a similar strategy in Singapore).

My answer to the question of “what should we do?” in the face of competition is the same regardless of the market:

  • Know your customers.

  • Keep your customers.

  • Fight back within reason.

Even tier-1 CSPs should get to know their customer segments more intimately and adopt a more segmented approach to fend off competition. As such, we are seeing more tier-1s spin off sub-brands to tackle the lower end of the market. Momentum is also gaining around customer retention. Loyalty schemes, from simple to sophisticated, are a must for every telco as even MVNOs are jumping onto loyalty for differentiation. CSP loyalty programs can improve net promoter score (NPS), lower churn, and, in rare cases, even add incremental revenue. Premium mobile customers are also being wooed to stay with bonus gifts (e.g., tablets, wireless chargers), yearly handset upgrade vouchers, bonus loyalty points, and free data. The incremental cost of these promotions is acceptable, compared to the cost of losing a high-value customer to a rival. CSPs will also need to compete on price but only where it makes sense to do so.

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