What the U.S. Prepaid Guys Can Learn From the UK's O2

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o2-logoPrepaid mobile service providers in the U.S. that are watching their margins get whittled away by brutal price wars should look across the pond to O2. The UK operator today released some impressive stats regarding Top-Up Surprises, a year-old mobile ad platform that rewards users with prizes as they renew their accounts and enables advertisers to interact with consumers. A campaign for the hit show “24,” for instance, encouraged users to send a text to a short code to receive free SIM cards, and a recent Blockbuster campaign offered a free trial of the chain’s unlimited-rental service as well as a $16 voucher to use in stores or online — and saw conversion rates north of 50 percent. “Mobile operators are now increasingly seeing the opportunity of working closer with brands,” O2 managing director Shaun Gregory was quoted as saying in a release.

European carriers have made solid strides in mobile advertising, leveraging the channel to help offset falling data rates in cutthroat wireless markets. Top-Up Surprises eschews traditional push marketing in favor of interactivity and messaging — components that are key to effective campaigns, according to a new report from Netsize. And as Virgin Mobile USA has demonstrated, prepaid users — who are typically younger, cost-conscious and ad-tolerant — seem to be particularly fertile ground.

That’s good news for service providers such as Leap Wireless, MetroPCS, TracFone Wireless and Sprint’s Boost Mobile, who are participating in the prepaid landgrab with cut-rate unlimited plans (GigaOM Pro, sub. required). Those companies are quickly approaching the bottom in terms of price points, but an infusion of mobile ad dollars could push those rates even lower by subsidizing services and allowing operators to deliver service more cheaply — if those ads are delivered effectively.

2 Comments

bipin

I think US prepaid guys can learn a lot more from India where 93% of subscribers are prepaid. There is cut throat competition in tariffs and cost per minute is plunging down like anything. We at http://www.mobikwik.com are trying to leverage this competition to create India’s first PULL brand of mobile services offering Voice, Data and Apps. Stay tuned in!

Scott

Not surprising that the prepaid crowd is eager to fork over their cash for goodies… that’s how they end up not having any left when the phone bill arrives. :D

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