Will MNP regime commoditize the app store experience ?
The situation:
In context with prepaid mobile data services--customers who pay upfront and are getting used to mobile app store concept. This has enabled a huge group of low-income consumers to experience apps at affordable prices. As the mobile app content industry matures, it must find new ways to sustain revenue growth. Encouraging longer, more profitable relationships through customer life-cycle management is a nascent thought for telcos providing voice and data services
The complication:
There are two key challenges:
1. Prepaid customers are often disloyal, adding to the low ARPU challenge. With MNP ruling in India, many subscribers would throw away SIM cards when their value is exhausted, buy a new one from any convenient vendor who makes the best offer. Similarly, there might be an increase in the percent of prepaid customers who own dual SIM cards and switch between them to take advantage of lower rates for calling within an operators' network and other discounts.
2. B2C app stores would soon become a commodity service in another 5-7 years moving from a fragmented market of many to a consolidated market of a few established app providers. As developers create and upload more applications to various app stores, the average rate of daily downloads per new application starts to tail off coupled with competitive pricing models. To add to this worry, MNP factor would allow subscribers to shift to a competitive voice service provider while they would wish to carry forward similar VAS/app store experience with the new operator.
The solution:
With the growing no. of smart phones having bigger screens, better touch pads, and more processing power, calculating the customer's likely lifetime value, the probability that a customer will switch providers and ways to retain the most valuable customer groups would be near impossible
Going forward, similar to 'Interconnect usage charges'(IUC) concept, app store may have re-incarnated as both exclusive premium app store for own subscribers and as shared basic app store open to competition. This would allow subscribers to carry on with the same mobile number and same set of downloaded apps while switching operator services. As far as customer lifetime value is concerned, the market may open up for better quality, shared and non-redundant app experience where revenues for an operator can come from both exclusive subscription and royalty usage charges paid by subscribers of the competitive operator.
