Press Release

Data users more likely to shift to postpaid: Study

16 May 2014

Mobile data and internet package users are more likely to migrate to postpaid connections than non-data and low-cost SMS users, a study by global accounting firm PricewaterhouseCoopers (PwC) has said.

The PwC-IIMA (Indian Institute of Management, Ahmedabad) survey on consumer value in Indian mobile industry shows the link between shifting to postpaid and data usage.

Overall, data users are two-and-a-half times more likely to shift to postpaid than non-data users," the survey findings said.

Internet pack users are four times more likely to migrate to postpaid, than non-data users, and two times more likely than low-cost SMS users, it added.The survey covered 2,152 consumers across 17 locations and six telecom circles. The interviews were conducted across different socio-economic classes, age groups, genders and professions.With subscriber growth slowing, one of the ways for telecom operators to increase usage and revenues, reduce uncertainty of cash flows and churn is by converting selected consumers from prepaid to postpaid, the survey said."Industry data show that, in general, postpaid consumers not only provide a steady revenue stream, but around 5 times the ARPU (average revenue per user) of prepaid," the report said.Postpaid subscribers also tend to spend more on other value-added services and their loyalty to the network is higher. The churn rate of postpaid subscribers is only 35-70% of prepaid, it added.Commenting on the findings of the PwC report, a Vodafone spokesperson said falling handset prices fuelled the data story further."We now see customers especially in major metros more open to experiencing mobile Internet which has led to an exponential growth in 3G," he added.Data and specially 3G usage in rural and smaller cities is still very basic, but is likely to pick up with affordable smartphones to fulfil information and entertainment needs, while voice would still be the main stay, the spokesperson said.Citing Vodafone's example, he said of 47.2 million total data users, only 5 million are 3G users (as of Q3 FY'14), so there is still a huge scope from 2G users to move to 3G user experience with more affordable smartphones coming in.Star India EVP and head (New Media) Ajit Mohan said: "We understood that the mobile phone is liberating sports fans. They do not have to be glued to the television screen anymore. We built a service that allows them to get on with their lives and yet there is an easy way to follow a live match."For the first time, consumers have discovered that video experience can be beautiful on a mobile screen and numbers are evidence of a big shift in consumption. Traffic is up over 40% over the last year. Star has had 35 million visits from fans to for IPL, he added


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