• Far Loon Yap

Trilemma of Telco Premiumization in pandemic period

Updated: Feb 8

21 January 2021 - Telcos in the Asia region have been quick and responsive in offering relevant services to subscribers who are staying at home, working from home (WFH) and to support the lower in group customer segments during the COVID-19 pandemic period. At the same instance, telcos are striking the balance to remain competitive.

(To jump straight into the full report, please click on this link - Trilemma of Telco Premiumization)

Asian telcos prompt use cases response to COVID-19 pandemic

COVID-19 pandemic has resulted in three (3) emerging customer segments namely Frontliners & Medical Professionals, WFH Community and Students & Teachers. Seven (7) telco use cases categories have been identified in the market namely Free Data, Extra Quota, Discounts, COVID-19 Awareness & Information Dissemination, Subscriber Benefits, E-learning and Repackaged Plans.

The coming of these use cases are closely knitted to the Cause (of COVID-19 pandemic) and Effect (on shift to new offerings).

Cause and effect of COVID-19 pandemic resulting new telcos services

The region response from Governments, consumers and telcos

Across the Asian region, Governments have responded with setting up COVID-19 portals, introducing telco regulations to ease burden on utilities expenses, implementing contract tracing app and promoting E-learning support to schools and university.

The region response to COVID-19 from Governments, consumers and telcos

Consumer response on utility are increased data consumption, changes in subscriber counts in mobile data (MD) and fixed broadband (FBB), heightened broadband usage and shift towards ‘essential only’ spending behaviour on telecom services for both telecoms (i.e. infrastructure investment and operating expenses) and consumer (i.e. services that matters).

The economic impact was caused by unemployment, reduced income, lower projected GDP and remittances. This has greatly affected the telco network effect as growth in overall bandwidth demand, network quality and user experience decline and delay in 5G rollout are witnessed.

Telcos’ trilemma on premiumization

Premiumization in FMCG is raising price with perceived value that customers are willing to pay. Generally, there are 6 paths to premiumization such as providing a safer, more innovative, a better experience, easier to be used, social image and more exclusive product or services.

Path to premiumization

Trilemma on premiumization by telco is to ascertain and maintain equilibrium by providing good QOS, offering an affordable Price and increasing its market Share to remain competitive in their respective countries market.

Premiumization pricing strategy and tactics can be considered only after having reviewed the QOS and market Share. Pricing consideration encompasses;

· Determining objective and the motivation.

· Ascertaining the methods and measure that can be taken.

· Employing tactics by approaching current use cases in the market.

Premiumization pricing strategy and tactics

The expected outcome of the exercise has 3 components;

· ͏Intent

· Measures

· Approach by use cases

The activities ahead are to review product performance, review market offerings and conduct customer market research.

Aleevar Consulting has prepared a telco premiumization checklist with the suggested future action plan and activities guide available. (Click on this link - Trilemma of Telco Premiumization)