Sun | Aug 20, 2017

FLOW hikes mobile data plans to boost income - Cheapest product doubles in price; now offering 'recharge' loan facility

Published:Wednesday | September 21, 2016 | 9:00 AMSteven Jackson
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.

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 seven-day 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 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 second-highest 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.

steven.jackson@gleanerjm.com