Ooredoo released today a new promotion that promises to be successful among the digital consumers.
With every top-up, Ooredoo Myanmar will offer 500MB of free Facebook, Viber and Beetalk plus 50 minutes on-net (Ooredoo to Ooredoo).
Depending on the top-up denomination, the promotion validity varies from 3 days to 15 days.
With this promotion, Ooredoo is making a bold move, inciting top-ups by seeding benefits with a risk of downsell on its data packages.
A hazardous seeding strategy
From a gross margin perspective, Viber and Beetalk as any instant messaging app consume very little amount of data. However, giving away free Facebook represents a huge amount of traffic to zero-rate all the more as Ooredoo promotion includes photos and videos (unlike Free Facebook from MPT). The cost can be mitigated with a Facebook cache hosted in-country.
Leaving the cost aside, this offers represents a significant risk of downsell for Ooredoo. Not only on-demand data revenue will be impacted but its new data packages (Paung Kuu) will also be affected.
14 millions Facebook users in Myanmar
According to We Are Social, there are 14 millions of Facebook users in Myanmar. And surprisingly (or not) there are also 14 millions of Internet users in Myanmar. 93% of them use Facebook on their mobile and 49% of them browse Facebook at least once a day.
Based on these figures, a conservative estimate of Facebook traffic share over the mobile operator network would be 60%. Traffic which translate into revenue leading to a significant downsell opportunity.
Moreover, the offer as it is designed will incite money savvy customers to top up low denomination on a regular basis to enjoy Free Facebook without paying a cent. Toping up low amount regularly mechanically lead to… less top-up. That is the whole concept of the daily dose so popular in Africa and India. Spend what you need for the day. And let’s see if tomorrow you really need it.
Furthermore, by pushing customers towards lowest denomination top-up, Ooredoo is leaving them the opportunity to use the money left on other networks.
Every offer or promotion is composed of risks and opportunities that need to be carefully assessed before going live. Our take on Ooredoo promotion is that it is definitely attractive for the customer. But it may have been preferable to design the offer so that the highest denomination top-up are more attractive. At the end of the day, the market will decide of the success of the promotion.
Interested by the offer?
Send SMS “Free” to 4444 (or) Dial *5050# to subscribe and Top Up.
More details on Ooredoo website.
Herbert is a nom de plume.
I am an experienced telecom professional blogging about the fastest growing Internet market in the world: Myanmar.