Mobile operators are always looking for ways to increase ARPU (Average Revenue per User), up until now that has been done mostly by offering the latest mobile devices at deeply discounted prices with the projection of raising ARPU came in the form of additional customers = additional airtime. This costly proposition involves subsidizing the high cost of the latest devices and with near saturated mobile markets, it mostly leads to existing customers looking to upgrade, thus having similar usage as the end result. There must be a cheaper way to accomplish this goal?
New customer acquisition is getting lower with markets nearing saturation levels. Pushing customers into newer devices is slowing due with many smartphone users today being satisfied with their devices and not all consumers can purchase or upgrade to the latest model. Studies show that mobile usage revenues are being slowed by customers not having access to power for recharging devices. Powerseed delivers the solution for mobile carriers to increase ARPU all at a fraction of the cost of discounting mobile handsets, thru its portable power products. Thus changing the form of raising APRU to increased power = increased airtime while providing an array of added benefits
Mobile Carriers benefit through using Powerseed Powerbank:
The number of global smartphone connections will triple over the next six years to reach 6 billion by 2020, according to a new market research report from GSMA Intelligence. GSMA Intelligence points out, with developing countries today accounting for two of every three smartphones worldwide. Furthermore, GSMA Intelligence forecasts, four of every five smartphones will come from the developing world by 2020.
With 196.8 million smartphone connections, the U.S. ranks second globally in smartphone connections. That actually pales in comparison with the world leader, China, where smartphone connections total 629.2 million, according to GSMA Intelligence.
Smartphone penetration is nearing 70-80 percent, a ceiling “at which growth tends to slow,” GSMA Intelligence notes. Growth has slowed in both North America and Europe, two regional markets where smartphone adoption is expected to reach 75 percent by 2020.
Still, smartphone connections rose 35 percent in North America and 39 percent in Europe between 2010 and 2013. Again, that can’t compare to the stellar growth rates experienced in Asia and Latin America over the same period, where smartphone adoption has grown at rates of over 80 percent.
In its report, GSMA Intelligence also highlights significant growth factors in the worldwide smartphone market:
- Rapid erosion of the Average Selling Price (ASP) of smartphones is accelerating user migration from basic and feature phones to smartphones.
- Demand for low-end smartphones is driving volume growth, with sub-$50 smartphones becoming a reality.
- Operator-branded smartphones sold via operator retail channels is a key trend driving the low-end segment.
- Operator subsidies continue to play an important role in driving the adoption of high-end devices, but are being scaled back at lower price tiers.
- The availability of 4G-LTE smartphones is influenced by the pace of allocation and assignment of 4G spectrum by regulators around the world.
- The availability of ‘data-centric’ services and tariffs is fueling the adoption of smartphones in both developed and developing economies;
- In the developing world, smartphone adoption is linked to the availability of data tariffs tailored for cost-conscious prepaid consumers.
- Smartphone growth is negatively impacted by taxation imposed on devices by governments, especially in price-sensitive developing economies.
- In the developing world, there is a correlation between an increase in Smartphone adoption and an increase in mobile broadband connections.
Intelligent Energy Studies
Recently, Intelligent Energy, commissioned a study of mobile users in the UK, India, South Korea and South Africa. It found that 32% users entered their phone’s “red zone” for low battery charge every day, with 22% running out of battery at least once per day. 65% respondents also said their phone use would change when their battery was running low, prioritizing how they used their phone.
How often do you completely run out of power on your mobile phone?
Users are clearly frustrated that having adapted to the portability and freedom offered by mobile services and smart devices, power limitations are now dictating how we live our lives. In a separate response 83.5% South African users said they would be willing to pay to charge their phone once it has gone flat.
This “mobile use rationing” isn’t just frustrating for the user. It’s bad for business. Studies have shown that increasing the availability of power to charge mobile handsets increases the Average Revenue Per User (ARPU) for mobile network operators. Battery fail is a global issue that many readers will be able to relate to, but it is a problem compounded in regions where access to a reliable electricity grid is limited. For example users in Kenya have pay as you go access to solar powered mobile charging equipment. Despite its merits, solar power has its limitations, most notably prolonged sunshine and an energy storage mechanism (such as a battery) to store energy and time-shift its release for when it is needed.
Intelligent Energy conducted field trials with a network operator to analyze the charging habits of African users, and the impact of introducing portable energy. We wanted to know how people would behave if the limitations of battery life were removed, and what effect this would have on their network use. Over the course of a month the study found that close to 80% made more calls, with almost three-quarters of users making longer calls and nearly 70% using more data to take advantage of the longer talk time and freedom from impending battery failure. Network usage increased significantly, with calls rising by more than 30% with an increase in average call duration of almost 30% and a nearly 40% uplift in data usage by users. Daily trends showed users charging throughout the day with peaks in the morning, lunchtime and early evening. Whilst small in scale, these trials show how users take advantage of improved device availability as the battery life constraints are removed and the opportunity for network operators to increase the utilization of their network. These advantages also translate to business benefits for employers and service providers such as mobile payment providers and social networks. With 508 operators currently investing in high-speed LTE in 144 countries and emerging market adoption of smartphones booming, Powerseed offers convenient instant power for the mobile user and a solution to the operator to increase revenue.
The Business Case for Mobile and Off Grid Charging Solutions
The Off-Grid Mobile Customer Today:
How do mobile phone owners charge their phones if they don´t have household access to electricity? Across the developing world, charging mobile phones on a pay-per-charge basis is prolific. For the average consumer, it is typical to take their phone to a local shop and leave it (or just the battery) to charge whenever power is low. A GSMA field study in Kibera, Kenya (Nairobi´s largest slum) indicated that the price of a mobile charge was KES 20 (approximately US$0.25) and required an average of two hours to complete. The frequency of charges per customer ranged between one per day on the high end and once per week on the low end. Presuming an average of three charges per consumer per week (twelve charges per month) it appears that the typical mobile consumer in Kibera spends US$3.00 on charging per month. This is a notable sum, given that the same customers spend between KES 4-16 (US$0.18-US$0.21) per minute for voice calls (depending on the tariff and time of day) and a monthly total of KES 400-500 (US$6.00) per month on airtime. The implication is that one third of total spend by off-grid mobile subscribers goes on power, rather than airtime.
Nearly 500 million people worldwide have a mobile phone connection but no access to the electricity grid.
Operator tests show that off-grid charging solutions can increase ARPU by 10-14%. This represents a US$2.3 billion market opportunity for mobile operators. There are 1.6 billion people in the world without access to grid electricity. The GSMA and Wireless Intelligence research estimates suggest that 30% of those people have a mobile phone connection. This means nearly 500 million people currently have access to a mobile phone but do not have their own means of charging it. Without reliable charging solutions, mobile phones end up running out of power. And when mobile phones are switched off, it results in missed calls and reduced airtime revenues for mobile operators.
Recent field trials in Haiti and Madagascar suggest that when off-grid subscribers acquire mobile charging solutions, usage and therefore ARPU increases by at least 10%.
Three early examples of markets where portable & off-grid charging solutions are making an impact include the following:
Example 1: Digicel Papua New Guinea
Example 2: Tough stuff Madagascar – “Solar charger increases phone usage by 0.5-1.5 minutes per day”
According to Tough Stuff – the provision of solar mobile chargers can increase mobile phone usage by 0.5 to 1.5 minutes per day. ToughStuff´s analysis comes from face to face consumer research in Madagascar in early 2009.
In developing markets where mobile phones are often used for only a few minutes per day, this represents a significant increase.
Example 3: Safaricom Kenya – “Lack of power means missed ARPU”
In August 2009, Safaricom launched a solar phone – a similar ZTE handset to the one launched by Digicel.
The company had been looking for alternative charging solutions for a long time, trying to match quality and price.
Since only 23% of Kenyans have access to the electricity grid, but mobile penetration has moved beyond 40% of the population, Safaricom has a lot of off-grid subscribers.
A US$2.3 Billion Market Opportunity
These examples suggest an exciting commercial opportunity exists for mobile operators. Even when applying conservative estimates about the increase of ARPU resulting from charging solutions (10%), and the average airtime spend of the off-grid customer (US$4 per month), for 500 million off-grid consumers the expected increase in direct revenues to operators would total US$2.3 billion per year.
When deciding on which mobile or off-grid charging solution to implement, there are four important choices to consider:
(1) Who will use it? Is the solution designed for use by an individual, or by a larger number of people?
Off-grid charging solutions generally fall into two broad categories – individual solutions and community solutions.
Individual solutions are the property of the consumer, and include stand-alone chargers that can be plugged into different phones (or other devices), or solutions that are integrated into the handset. The latter can, for example, come in the form of a solar panel on the back of a phone, a wind-up mechanism integrated into the phone, or a handset that runs on over the -counter batteries.
Community solutions provide charging possibilities for multiple users. This can be in the form of a charging dock attached to a base station (cell phone tower), or a solar charged charging station located in a village centre. Community solutions tend to be operated by mobile operators or third parties with pre-existing distribution networks in rural communities, such as non-governmental organizations. Community solutions allow for a larger number of people to be reached, while reducing the cost of the solution per user.
(2) Who will own it?
Will the solution be owned by a consumer, an entrepreneur, a community, a technology company, a mobile network operator or an NGO?
Consumers value direct ownership of solutions, however individual ownership means the investment requirement falls fully onto the consumer, which even at a cost of US$10 or US$20 per week may be a major barrier to adoption in low income areas.
(3) What will it charge?
Will the solution charge only one phone, a few phones, or can it also charge other devices such as lights and radios?
Since phone charging is only one of the reasons off-grid people need electricity, the possibility of charging other devices with a solution can contribute to its popularity with consumers. This is the case with both auxiliary chargers and community solutions that provide standard sockets. When the charger is integrated into the phone, its use is limited to the phone itself. The advantage is however that the charger is always present, which makes it easier to keep the phone charged and reduces the risk of loss or damage.
(4) Who will finance it?
Will the consumer pay for the solution? Or will the mobile operator bear the cost?
Will the operator subsidize it, or will it be necessary to provide microfinance?
The price consumers ultimately pay for a charging solution is a very important factor in the uptake of the solution. People living in off-grid areas are typically low income and their spending capabilities only allow for small, frequent payments.
The growth of mobile uptake among low income consumers has been accelerated by the provision of ever smaller airtime top-up values. Mobile operators have reduced the minimum purchasable amount to as little as US$0.03, which can be bought from airtime agents via text messaging (SMS). According to the The Next 4 Billion report, authored by the World Resources Institute and the World Bank, this payment innovation has allowed for the rapid growth of mobile communication services to millions of low income people. The future growth of charging solutions may depend on the ability of the mobile industry to enable similarly small, incremental payments for power and charging devices.
Operator Interviews: Key Findings
Mobile operators were interviewed on their current practices and preferences in the field of off-grid charging solutions. Eighty per cent of the respondents were either the decision maker on off-grid charging solutions within their company or were in a position to influence the decision maker.
60% of mobile operators surveyed already have off-grid charging initiatives or are investigating off- grid charging solutions.
The market is gathering momentum.
78% of mobile operators surveyed prefer a combination of individual and community solutions, because both individual and community solutions are important to trial.
*Only 30% of mobile operators surveyed had knowledge of current market prices for individual solutions. There is a perception that the cost of deploying off-grid or mobile charging solutions is high.
*Price, plus the ability to charge non-mobile devices (e.g. lights) were rated as the two most important features for individual charging solutions.
The importance of the ability to charge other devices indicates a preference for stand-alone charging solutions over integrated versions, such as a solar phone.
Sources: GSMA; Intelligent Energy, Afrofocus; The Energy Loft
The Benefit from Power Banks
- Charge your mobile device anytime and anywhere: When mobile devices run low on power customers limit their usage. Being able to recharge devices on the go leaves consumers at ease knowing that they don’t have to limit their usage of making calls or using the internet just to save battery life. They no longer have to worry about not having enough charge on their devices to make it thru their day. The more they can use their devices longer on the network leading to greater revenue that can be derived.
- Operable for most mobile devices: No matter whether you have a mobile phone from Samsung, Apple or Nokia phone, you can use just about any brand of mobile handset to charge with the Powerseed. Can charge other mobile devices: Apart from cell phones, you can also get other electronic devices recharged. Portable hotspots, Tablets, Portable Gaming stations, Bluetooth speakers or headsets, Go Pro cameras and more can also be recharged, so long as it charges via USB.
- Great for travel: Powerseed chargers can also be used during the daily commute or overseas travel. Whether using public transportation such as planes, trains and buses or going events likes trade shows, expos and concerts, having portable power can come in handy. Customers can continue to use their mobile devices to run business transactions, enjoy posting to social media sites, or simply continue chatting or texting.
- Emergency situations: Powerseed comes in handy for emergency uses during natural disasters that cause power outages like a hurricanes, floods and landslides. Or even being stranded with no power while enjoying nature on a hiking, camping or fishing trip. – Some devices have built in LED Flashlights
- Charges Multiple Devices: Apart from cell phones, you can also get other electronic devices recharged. Portable hotspots, Tablets, Portable Gaming stations, Bluetooth speakers or headsets, Go Pro cameras and more can also be recharged, so long as it charges via USB.
- Portable: Powerseed devices are high portability because of its lightweight and unique design. Even with the larger capacity models, users find it very useful to take along on their daily commute or long distance travels.
- Energy Efficient Consumption: The Powerseed power bank is designed to minimize its own energy consumption thru the use of the auto power off feature when your device is fully charged. This is specifically designed to conserve energy and prolong battery life, allowing the Powerseed to store for several hours to keep feeding power to your phones and mobile devices.
- Prestige, Value and Increased Publicity: Powerseed products are in the hands of some of the world most famous and influencal people. Powerseed power banks are a global brand that is unique and trendy in its size, capacity and design. The devices stand out and make a statement. They are offered in a variety of colors and power capacity to help you be unique in your own way. Private labelling of the Powerseed products can provide additional publilicity boost to mobile opeators as they are frequently used and showin in public prominently dispalying your own brand.
- Superior Materials & Quality Manufacturing: One greater feature of Powerseed products is that it uses the high Quality of components such as Samsung, LG and other high grade cells. The use made of aircraft grade aluminum and high end plastics for housing materials. The implementation of over-charge and discharge protection circuitry designed to protect your high end portable devices. All to provide a high quality product that will perform well and minimize the risk of failure and damage. Powerseed manufactures quality products that can be associated with your brand.