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Life on web: Why Ukrainian operators provide mobile Internet practically for free?

Author : Nina Hlushchenko

16:19, 16 October 2017
Life on web: Why Ukrainian operators provide mobile Internet practically for free?

Author : Nina Hlushchenko

During the last three months, all three large mobile operators of Ukraine have presented tariff plans with a large amount of traffic and unlimited certain Internet services. We understand, why it is necessary for operators and subscribers

16:19, 16 October 2017

112 Agency

Vodafone and Lifecell introduced tariff plans in the summer, but these plans have a limited validity period - until January 31, 2018. Kyivstar does not say about the time limits, the current tariff line will be valid until the next update.

Why do operators need new tariffs?

At first glance, it looks like a continuation of the price war for the subscriber. But the prices for calls in Ukraine are one of the cheapest in the world, there is nowhere to decrease them. Operators need to increase revenues. And the new tariffs will help to raise ARPU - the monthly amount that the subscriber spends on communication. Operators, one way or another, talked about this, when the country was just introducing 3G, - investments in the network should be returned.

In turn, plans with a large amount of Internet traffic are higher than the average ARPU of each operator. The transition of subscribers to new tariffs, of course, will allow operators to increase their monthly revenues. But this is not the only reason.

If you look closely at the terms of the tariffs, it becomes obvious that each market player gives subscribers the opportunity to get used to consuming multimedia content from mobile devices in any place - without Wi-Fi. All over the world, in all networks (mobile and fixed), video is the main driver of growth in traffic consumption, which in turn is spurred by the development of network technologies. In particular, the growth of 4G, as well as changes in the behavior of subscribers themselves - new Internet users from developing countries prefer voice and video messages, not just texts, they do not have the habit of writing messages or reading articles.

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Ukraine is also on the verge of 4G - a new generation network should appear in the major cities of the country next year, if everything goes well with tenders. About the reasons why subscribers need 4G, we can talk a lot - the topic is worth of a separate article. But for operators to be able to recoup investments into the network in the foreseeable future, they need users of the new service, preferably immediately, people who are already accustomed to watching a lot of online video and immediately appreciated the advantages of next-generation networks. Ukrainian users already have a critical mass of devices with support for fourth-generation networks. But they do not yet actively consume traffic. So, according to the Kyivstar report, for the second quarter of 2017 the average traffic consumption per subscriber per month was 758 MB. This is approximately three times more than during the same period last year. Vodafone and Lifecell did not sound the latest indicators, but Vodafone had comparable results about a year ago, that is, the figures should have been growing now, as companies were encouraged by new tariffs and shares.

Even if this parameter is twice as large, it is still a little bit. So, according to the annual report of the global operator Vodafone (we give it as an example, as it is the second largest mobile operator in the world, which works in many markets, so its results are largely indicative) for 2016, 50% of traffic in the network was generated by 4G users, the number of which is 47 million with a total operator base of 462 million and the base of mobile Internet users - 197 million. The tenth part of the operator's subscribers generates half of the traffic in the network. And they are the most tasty piece of pie for the operator.

Accordingly, the Ukrainian operators have a task - to teach their users to consume more and show that it is convenient and not too expensive. In the same way, Ukrainians were taught to use roaming - as a result, all operators increased the consumption of services outside the country. Certainly, in 2018 tariffs for mobile Internet will grow, but the subscribers will already have a habit, and they will be ready to pay for it. At the same time, if nominally subscriber spending grows, then the actual cost of communication will either fall or stay at the same level, as for the same money users will receive even more services. In particular, we are talking about traffic.

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