Mobile Minutes as a Currency

Pablo Valerio, International Business & IT Consultant | 8/20/2013 | 45 comments

Pablo Valerio
What is the connection between Indonesia, yogurt, and mobile phones? They point to the type of creative giveaway retailers need to be thinking about today with the help of their CIOs.

In most developing countries, few people have a landline or broadband Internet, but almost everyone now has a mobile phone. In countries such as Indonesia, 93 percent of the population has a mobile phone and 91 percent are using a prepaid plan. Mobile phones have transformed the lives of millions of people in those countries. Now they can communicate, perform basic banking with programs such as M-PESA, get basic healthcare advice, access to education, and more.

But the average balance on those phones is really low, usually below $2, just enough to make a few calls, and airtime is still expensive. While in most countries receiving calls is free -- if you are within your home area -- it is very expensive for the caller.

That is why offering mobile minutes as a promotion in those markets is very successful. Last year Danone, the French food giant, wanted to promote their Activia and Milkuat yogurts in Indonesia. Indonesia has emerged as Danone's fifth-largest national market in total sales, but the full potential of the market is still untapped. They selected Jana, a media organization working with the major telecoms, and offered an online system for customers to buy their yogurt and get mobile minutes as a benefit.

Mobile operators usually sell bundles of minutes and data packages to wholesalers, especially Virtual Mobile Network Operators (MVNOs), which in turn sell those as cheaper packages to pre-paid users. This generates additional revenue for the operators, allowing them to leverage the use of their networks.

Danone bought a bunch of minutes at a discounted rate, and used them to promote their product. The results were astonishing: Within the first month, sales of their BIO line jumped 27 percent, and the promotion was just starting. And 100 percent of the customers that benefited from the promotion signed up for updates and future deals.

Another example of effective use of technology was online polling. CNN commissioned Jana to run a mobile survey in Africa on how people felt about the possibility of an African Pope. Jana rewarded people answering their surveys with additional minutes on their mobile phones. In Africa there are more mobile phones now than in the US, with over 648 million in 2011, most of them with prepaid plans.

Will that work in Europe or the US? I believe so. Many people moved from expensive contracts to pre-paid plans with VMNOs to save money. And most teenagers are using pre-paid plans. Specific offers to those customers offering mobile minutes or credit can be quite successful.

And there are the unbanked, who have no access to mobile contracts because they lack bank accounts and credit cards. Those customers are mobile phone users looking for easy ways to refill their prepaid plans.

With fierce competition, manufacturers and retailers need to find new ways to engage customers. Mobile minutes can be the new currency people want to have. Offering them minutes as rewards can be inexpensive and can get a boost on any consumer business.

View Comments: Newest First | Oldest First | Threaded View
Page 1 / 5   >   >>
batye   Mobile Minutes as a Currency   2/6/2014 1:33:32 PM
Re: not sure for U.S.
same trend I see in Canada  as everyone is droping land lines switching everything to mobile... also in Russia I did see simular concept in work... where Mobile minutes get value as currency...
kstaron   Mobile Minutes as a Currency   8/29/2013 11:02:50 AM
not sure for U.S.
I'm not sure how well this would work in the U.S. While I know several people who have dropped their land line and gone to mobile devices as their only phone line, mostly these lines are on a plan with unlimited minutes (or many many minutes). However with the amount of people buying smartphones, providing blocks of a data plan to customers for currency might work. It all depends on the demographics they are trying to pull from.
freespiritny25   Mobile Minutes as a Currency   8/27/2013 3:34:08 PM
Re: Mobile Minutes as a Currency
@Pedro, Yeah, think it would be a success in Latin America as well. I also think people in countries with families that live abroad may also jump on this.
freespiritny25   Mobile Minutes as a Currency   8/27/2013 3:30:46 PM
Re: attention caught
@Taimoor You are probably right. I would be interested in seeing poll results for this with the youth as the poll participants. It might vary by gender.
freespiritny25   Mobile Minutes as a Currency   8/27/2013 3:28:51 PM
Re: attention caught
This reminds me of a charter school that adds minutes on their students' cell phones as a reward for good grades and positive behavior. True story.
geeky   Mobile Minutes as a Currency   8/26/2013 5:22:57 AM
Re: attention caught
@Don: Do you think it's risky to go for cheaper stuff ? Also all the cheaper stuff are cheap in quality ?    
Don K   Mobile Minutes as a Currency   8/25/2013 11:30:49 PM
Re: attention caught
@Taimoor: Yes maybe but they have certain limitations. The demand will be high in the initial stages but when its being used the demand will go down and that is the point where the reliability will be measured.       
RashmiK   Mobile Minutes as a Currency   8/25/2013 1:50:01 AM
Mobile services such as M-PESA play a huge role in the daily operations of the people in most developing countries. For most producers to exploit the fact that practically everybody right now has a mobile phone but is under prepaid systems enable them to boost their sales volume. through assuring the potential customers of free minutes if they purchase products from you has been proved to boost the sales volume hence most producers prefer this to other option that usually have uncertainties . People really need the minutes therefore providing them with the minutes can just get you what you want as a producer.
RashmiK   Mobile Minutes as a Currency   8/25/2013 12:23:51 AM
Re: Mobile Minutes as a Currency
The usage of mobile phone has become a basic need and innovative ways like Bonga Points which are used with the M-PESA services in east African countries are really reaping from the undertaking. The points accumulate as people load airtime after which they can be rewarded with free minutes on 'redeeming'. The practice is proven and very effective other countries ought to try it and more specifically retailers.
Taimoor Zubair   Mobile Minutes as a Currency   8/24/2013 7:48:11 PM
Re: attention caught
You're right. But according to my observation, cheap text packages appear to be a bigger attraction for the people.
Page 1 / 5   >   >>

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