FLOW hikes mo­bile data plans to boost in­come

Cheap­est prod­uct dou­bles in price; now of­fer­ing ‘recharge’ loan fa­cil­ity

Jamaica Gleaner - - BUSINESS - Steven.jack­son@glean­erjm.com

TELECOMS CABLE & Wire­less Ja­maica (C&WJ), which trades as FLOW, is de­fend­ing price hikes on its pre­paid mo­bile In­ter­net, which ef­fec­tively dou­bled the cost of a key mo­bile plan to cus­tomers within four months.

FLOW Ja­maica ar­gued that its 4G net­work still of­fers lower rates than main ri­val Dig­i­cel. The price rise in Au­gust, how­ever, slashed any sub­stan­tive pric­ing dif­fer­ence be­tween both telecoms providers, es­pe­cially on the cheap­est plans.

“This is only the sec­ond price change for 2016,” said Kayon Wal­lace, FLOW Ja­maica’s di­rec­tor for cor­po­rate com­mu­ni­ca­tions and stake­holder man­age­ment, in re­sponse to Gleaner queries.

One of FLOW’s three-day pre­paid mo­bile data plans — dubbed ‘3Day’ — jumped from $100 to $150 to $200 be­tween April and Au­gust of this year, ac­cord­ing to its web­site. That rate is a key plan for medium-sized data users. Dur­ing the same pe­riod, its cheap­est data plan jumped from $50 to $75.

The rise in mo­bile data rates comes across as counterintuitive in an era where the price of mo­bile voice de­creased by roughly three-quar­ters over the decade. Telecoms, how­ever, are in­creas­ingly view­ing data as their key rev­enue driver.

Wal­lace ar­gued that the com­pany re­mains “mar­ket lead­ers” in pro­vid­ing the “best value” on all prod­uct lines, pre­paid In­ter­net in­cluded.

“We con­tinue to of­fer the best prices and data al­lo­ca­tions in mar­ket on the three-day plan of­fer­ings,” she said, adding that ac­ti­vat­ing cer­tain data plans pro­vide the user with voice call­ing dis­counts.

For Wal­lace, the cus­tomer con­tin­ues to ben­e­fit with a va­ri­ety of plan choices that fit their In­ter­net us­age and bud­get re­quire­ments.

“With data plans as low as $75 and oth­ers that pro­vide call­ing rates as low as 99 cents, there is a plan that fits their life­style,” she said.

FLOW, which is now ul­ti­mately owned by Amer­i­can com­pany Lib­erty Global, op­er­ates a full-ser­vice telecoms ser­vice which in­cor­po­rates land­line, In­ter­net, mo­bile, cable ser­vices.

The ad­just­ments by the Ja­maica op­er­a­tion started in April when FLOW changed its 3Day plan of­fer­ing 50 megabytes at $50 to a 3Day plan of­fer­ing 75mb at $75.

Con­cur­rently, the telecoms changed its 3Day plan of­fer­ing 250mb at $100 to a 3Day plan of­fer­ing 300mb at $150. Then in Au­gust, it ad­justed its 3Day plan of­fer­ing 300mb at $200. It, how­ever, kept the 3Day plan at $75 un­changed. At the same time, its sev­en­day plan of­fer­ing 1 gi­ga­byte of data at $600 was dis­con­tin­ued.

Dig­i­cel’s pre­paid mo­bile prices ap­pear un­changed over the pe­riod, with its three-day plans at $80 for 80mb and $200 for 250mb, ac­cord­ing to its web­site. Dig­i­cel also of­fers a two-day pack­age at $130 for 225mb. Dig­i­cel Ja­maica has promised to re­spond.

Dur­ing the sum­mer, Dig­i­cel launched its mo­bile LTE ser­vice which of­fers data speeds of up to 50mb per sec­ond, or about five times as fast as nor­mal mo­bile In­ter­net. The key pack­age for LTE hov­ers at some $900 per week for 1gb.

MO­BILE NET GOALS

C&WJ/FLOW Ja­maica Man­ag­ing Di­rec­tor Garfield Sin­clair told share­hold­ers at the com­pany’s an­nual gen­eral meet­ing on Septem­ber 7 that LTE rates ap­peared pro­hib­i­tive and FLOW would likely avoid in­vest­ing in LTE in­fra­struc­ture for its net­work. The com­pany in­di­cated that it would in­stead fo­cus on get­ting more cus­tomers to sub­scribe to its ex­ist­ing mo­bile data In­ter­net. Roughly half of FLOW sub­scribers utilise the ser­vice.

C&WJ posted its first an­nual profit in a decade at year end March 2016 due in part to non-cash im­pair­ment charges (bun­dled as ex­cep­tional items), ef­fec­tively shift­ing from an ex­pense of $6.9 bil­lion in 2014/15 to­wards in­come of $1.13 bil­lion in 2015/16. Then in the June 2016 first-quar­ter, non-cash im­pair­ments re­sulted in the com­pany In this Novem­ber 2015 photo, FLOW cus­tomer ser­vice rep­re­sen­ta­tive Olivia Thyme poses for a selfie with Jahzmin Thomp­son at a FLOW store in Kingston. FLOW Ja­maica has been ad­just­ing its mo­bile data plans since April to lever­age in­come from the grow­ing seg­ment. post­ing a net loss of $695 mil­lion, or more than dou­ble the net loss a year ear­lier, de­spite dou­ble-digit growth in rev­enues and mo­bile sub­scribers.

Wal­lace told Gleaner Busi­ness that FLOW re­cently up­graded its mo­bile Net­work to 4G (HSPA+) while im­prov­ing its mo­bile In­ter­net suite of prod­ucts.

“We con­tinue to sub­sidise smart­phones with the goal of in­creas­ing mo­bile In­ter­net adop­tion in Ja­maica,” said the com­mu­ni­ca­tions di­rec­tor.

“Dur­ing the net­work up­grade, we main­tained the pric­ing strat­egy of charg­ing for data con­sump­tion and not for the dif­fer­en­ti­a­tion the tech­nol­ogy used to de­liver mo­bile In­ter­net. As we look to­ward LTE, our cur­rent po­si­tion on pric­ing is to con­tinue pric­ing for data con­sump­tion used, and not for the tech­nol­ogy used to de­liver the ser­vice.”

NEW AP­PLI­CA­TION

In a bid to get more peo­ple on­line and us­ing more talk min­utes, the com­pany also launched a new mo­bile ap­pli­ca­tion called FLOW Lend. The app avail­able for both An­droid and Ap­ple phones al­lows users to re­quest credit ad­vances or recharge ‘loans’ for phone ac­counts near­ing a low bal­ance. Once the loan is ap­proved, the amount is added to the cus­tomers’ ac­count and they can call, text and even ac­cess data.

Cus­tomers are en­cour­aged to pay back the loan within a week, but have up to 30 days to re­pay.

In­ter­net rev­enues ac­counted for the fastest growth area and the sec­ond­high­est earn­ing ser­vice for telecoms providers, ac­cord­ing to the most re­cent in­dus­try data re­ported on by the Of­fice of Utilities Reg­u­la­tion for Septem­ber 2015.

In the OUR re­port, mo­bile rev­enue hit $13 bil­lion, up 6.5 per cent year on year; fixed line rev­enues in­creased 16 per cent to $2.6 bil­lion; and lo­cal In­ter­net rev­enues rose 53 per cent to $4.5 bil­lion.

Last year, the size of the pop­u­la­tion us­ing the In­ter­net amounted to 1.46 mil­lion – a base that is more than half of Ja­maica’s 2.7 mil­lion pop­u­la­tion. That fig­ure in­cludes 1.3 mil­lion mo­bile In­ter­net users, 161,000 broad­band sub­scribers and 966 nar­row­band sub­scribers, ac­cord­ing to data from the lat­est Eco­nomic and So­cial Sur­vey Ja­maica pub­lished by the Plan­ning In­sti­tute of Ja­maica.

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