By a recent estimate, mobile network operators (MNOs) in Pakistan have spent over Rs 290 million on branding for 3G and 4G. As reported by Brandsynario, the bulk of this spend (80%) has been on the tried and tested medium of TV and the remainder largely on print for the period April-August 2014. Hopefully some of it was also spent on digital. Appropriately, all MNOs took to SMS marketing to apprise their network subscribers of forthcoming 3G services, inviting them to try the service free for a few weeks, if available, in their area.

So what has been the result six months down the line? Have mobile subscribers taken to 3G and 4G the way they were expected to? Has the advertising paid off? In all fairness, it is too early in the new technology adoption cycle to expect the uptake of 3G and 4G to have been as ‘phenomenal’ as touted by the Government and other stakeholders.

Adoption rates for any new generation technology are not only dependent on advertising. Infrastructure deployment, urban/rural coverage, educating the public about the new technology, conversion of existing mobile data users to high-speed data usage, compatible handsets and availability, mobile content and pricing for the new technology, must all be considered in order for any 3G or 4G ecosystem to establish itself.

Lacklustre 3G?

Some analysts have gone as far as saying that the introduction of 3G has been ‘lacklustre’ or even ‘rejected by the public’, while the MNOs have remained fairly quiet in terms of following up 3G advertising since the flamboyant launch of 3G services earlier this year. Nevertheless, MNOs have now started to share some tentative figures of the uptake of the new generation technology.

At the launch of Pakistan’s first 4G (LTE) service at the end of September, Dr Fan Yunjun, CEO, China Mobile Pakistan, disclosed that Zong has added over 850,000 3G customers on its network since the company launched 3G. The CEO’s opening comments were further strengthened with the words that Zong intends to “inject one billion dollars in Pakistan over a span of three to four years” – a testament to the fact that the company will work seriously to gain more traction on its new generation networks.

At a recent post-3G media round table moot, Irfan Wahab, CMO, Telenor while declining to disclose exact 3G uptake figures on Telenor’s new 3G service, was nevertheless confident that the impetus for growth has started. “We have witnessed a strong surge in the uptake of services. The majority of our customers – who used the free or test service – have been opting for the paid service…” Telenor has approximately eight million GPRS/EDGE users on board and is likely to convert this 2G user base to 3G high-speed mobile data services as it expands its 3G network coverage to 32 cities by the end of this year. Unlike its competitors Telenor is keen to put its 3G footprint on as much of the rural map as possible and not focus solely on the urban (and more populous) centres. It is pertinent to point out at this point that Telenor is already seeing an increased rate of mobile bandwidth consumption for its new 3G users tallying to an increase in ARPU, if it can continue to successfully convert existing GPRS/EDGE users to 3G.

No dearth of 3G handsets

Even before the launch of 3G services, the availability of smartphones – most of which are 3G enabled – had dramatically increased in the last year, with industry insiders estimating that nine percent of mobile subscribers in Pakistan owned a smartphone in 2013, a figure that almost doubled to 17% by mid-2014. Leading the surge, QMobile (with more than 50% market share as agreed by many industry observers), has been largely responsible for up-ending the market with the introduction of smartphones under the Rs 10,000 price point, thereby opening up smartphone ownership to many mobile users who could previously only afford a feature phone or low-end phone.

Affordable 3G handset availability is hence a strong element and driver for the uptake of 3G, and handset vendors such as Huawei, LG, Nokia, QMobile, Samsung, and a recent entrant, Voice, are creating a conducive environment for the MNOs. To some extent, co-branding opportunities have been exploited by the MNOs and the handset vendors and these partnerships will only reinforce an already strongly established element of Pakistan’s 3G ecosystem.

While some select 4G-enabled handsets are present in the market, related promotion has been toned down in anticipation of Zong’s newly launched 4G service and Warid’s awaited one. Handsets in this category will undoubtedly be more expensive, especially since 4G being a wholly IP-based cellular service is a complete technological shift away from 3G. Nonetheless, Zong has set the ball rolling by offering its own 4G smartphone, the M811.

Ads and prices to match?

While continuous urban/rural coverage as well as handset pricing and availability augur favourably for local uptake of 3G/4G, advertising and service pricing seem to be quite wide off the mark. While some MNOs did a surprisingly good job of pre-launch 3G promotions such as those by Mobilink, none of them scored well at actually ‘educating’ the mobile user about the 3G experience once the 3G auctions were over. Focused more on building up the ‘3G brand’, rather than on building up the knowledge of the would-be 3G user, seemed to be the train of thought behind most of the 3G/4G related campaigns. Whenever a new technology is introduced in any market, it is imperative to cut through the hype and portray the actual aspects of the service (mobile data, mobile internet, download speeds, mobile video) in as simple terms as possible, especially when trying to convert existing 2G users to the 3G dimension.

In my view, pricing has not been thought through properly. Offering ‘daily’, ‘three-day’ or ‘weekly’ 3G bundles is not a good incentive to convert existing 2G users to permanent 3G users, as these short bursts of 3G usage will not apprise the mobile user of the true potential of having a dependable 3G connection. MNOs need to encourage a scenario where monthly packages are taken up both to assure a steady ARPU based on high-speed mobile data as well as to encourage the mobile user to be a regular and steady mobile data user.

A useful strategy would be for MNOs to keep track of the mobile data usage trends of their existing high-ARPU GPRS/EDGE users, on-board them with initial free 3G usage and then incentivise these high ARPU subscribers with targeted 3G/4G packages tailored to their usage. This requires knowing the mobile data user and the way that he/she is consuming mobile data itself. To what extent the MNOs are making use of this targeted strategy is debatable as most of the Rs 290 million ad spend seems to have, unwisely, been directed at the ‘masses’.

Yasmin Malik is associated with the UK’s Informa Telecoms & Media. yasminmalik1@yahoo.com