Creating new MNO revenue streams through fresh consumer insights
The recent COVID-19 crisis has dramatically accelerated the use of mobile devices for e-commerce. Doug Gray, Chief Commercial Officer at Maxa, looks at how MNOs can combat the long-term decline in ARPU that has dogged the sector, grow revenues profitably and enhance the user experience by harnessing new insights related to consumer behaviour.
For more than a decade, declining Average Revenue Per User, or ARPU, has been this sector’s bugbear. A further issue – linked to lower ARPU – has been a long-term decline in profitability. Research by independent consultant David Pringle shows average profitability for European telecoms more than halved between 2010 and 2018, from 44 billion Euros to 20 billion Euros per year – a decline which looks worse if adjusted for 2% inflation per annum over the period.
For some time, telecoms strategists have hung their hopes on new revenue streams linked to the power of 5G networks. However, 5G’s potential has been slow to materialise given roll-out challenges in Europe, though US and Asian roll-outs remain broadly on track. Even after 5G, though, it’s not clear that streaming services and interactive gaming are necessarily going to prove to be telecom’s saviour.
Consumers have embraced shopping over their smart phones during the COVID crisis in a way no analyst could have predicted. This desire for remote forms of commerce has extended to all kinds of contactless transactions, with mobile commerce via smartphone now accounting for 79.1% of all online shopping in the US, compared with 49% during 2019, according to a May 2020 study of 3,500 consumers.
In-store, consumer behaviour has pivoted towards remote transactions, too, with Mastercard reporting contactless transactions up 40% globally in Q2 2020 compared with the previous year. Arguably a more telling statistic is the number of consumers who now view contactless transactions as a “must-have” when paying – this rose 26.6% to almost 40% of all consumers polled by The Futurist.
Recent consumer surveys suggest these changes in behaviour are permanent. For instance, mobile banking registrations are up 200% in the US since the start of the crisis, according to Fidelity’s Data Services team: when polled, only 40% of these new registrants said they intended to return to traditional banking after the crisis. So much for the good news: the not-so-good news is that fraud is now migrating fast to mobile devices, and fraud types such as user impersonation, ID theft, SIM-swapping and others are increasing rapidly. Data from e-commerce fraud specialists SIFT shows a jump of 50% in mobile commerce fraud attempts since the start of the crisis in early March.
Consumers are looking for a way to pay with their digital devices which is easy, quick – and above all safe. A payment method that is based on things they understand, and doesn’t involve lots of passwords, confirmations and One-Time Passcodes via SMS. MNOs continue to search for a low-cost means of capitalising on the huge boom in m-commerce which doesn’t involve complex integrations, huge marketing campaigns, regulatory burdens or product support costs – one which leverages existing assets where possible and yet still delivers revenue to the bottom line.
Online Contactless is an emerging technology that allows the consumer to pay for their online shopping by tapping their own bank card against their own mobile phone. As no personal data is shared, it makes it a fast, easy and secure method of online payment for both consumer and merchant. The merchant benefits from reduced checkout friction, lower cart abandonment and increased conversions – and the consumer gets to use a familiar, convenient and trusted payment option.
Online Contactless also creates a new recurring revenue stream for mobile operators, as they receive revenue as a percentage of the total transactions made by their subscribers using this payment method. Online Contactless has grown out of the huge uptick in online shopping and contactless payments, combining the best of both to deliver a new payment experience with significant benefits for all stakeholders.
We’ve partnered with Mobile World Live to share how mobile operators are using pioneering business models to establish a new recurring revenue stream and reduce customer churn – without any additional cost.
This new webinar will show you how the latest consumer insights in online payments can be used to increase ARPU by 10 – 40% with margins of almost 100%, and significantly reduce customer attrition.
We’re going to be joined by renowned global consumer research agency, Kantar TNS, and payment systems specialist, Nexi bank, to understand the latest consumer attitudes towards ecommerce and explain how mobile operators can align these with a new business model to drive revenue.
With ecommerce and contactless payments growth surging over recent years – amplified further by COVID-19 – new opportunities are emerging in this space for forward-thinking mobile operators.
This webinar is an Executive Summary of a new industry report illustrating the latest consumer trends and new commercial opportunities for mobile operators. All webinar registrations will receive a copy of the full report.