Spain has one of the largest mobile markets in Europe, with effective competition from four mobile network operators and a growing number of resellers. The economic crisis, combined with new EU regulations and the fierce competition has driven down the cost of mobile calls by 35% since 2005. As if that’s not enough, the Spanish prepaid mobile market has encountered another challenge which seriously affected ARPU.
Fake SIM activations, also known as “revolving doors”, have recently hit Spain, significantly impacting operators’ revenue. Some users activate a new card due to the loss of an old SIM, but others take advantage of an attractive acquisition offer (e.g. free airtime, subsidized handset…). In such a case, the old SIM remains dormant and in due time is considered a churned customer.
How can operators handle such a phenomenon? How can they identify and differentiate between the different kinds of SIM activations, and more importantly – how can they be prevented?
Here are a few ways operators can detect and prevent fake activation by as much as 90%! (based on an implementation at a European customer):
- Screen in real time new activations & usage
- Follow behaviour of existing and new customers after acquisition campaign
- Approach new customer with “loyalty offer’
- When suspecting a customer is dormant, approach that customer with a personalized offer to reactivate old SIM
- Encouraged the service provider to commission their agents’ on handset upgrades rather than new SIM activations. Many prepaid service providers do not allow handset upgrade and by providing such a service prevention of fake activation can be attained
- Provide deferred offers such as 20% bonus on first top-up in the upcoming three months
- Improve upgrade terms for existing customers rather than new ones.
To summarise, with fake activations becoming an increasing challenge to service providers, the trend that became popular in Spain is now spilling over to other countries such as France and UK. This requires operators to detect prepaid churn practices, such as customers that abandon the operator once their SIM card credit is consumed, without making any top-up. Operators also need to monitor SIM activity (disconnections without top-ups) by mapping the acquisition campaigns with the impact of this type of churn, correcting the disequilibrium between the acquisition and the retention offers.
Once these two actions are taken, an automatic system providing and designing personalised marketing should be put in place offering each customer a price and offer fitting his or her personal attributes, behaviour and state.