Aurora Magazine

Promoting excellence in advertising

Published in Jul-Aug 2015

From devices to 3G

How mobile operators are successfully using device penetration to push their 3G options.

Pakistan launched 3G over a year ago. During this short period telecom operators have been able to generate high awareness levels of this new technology and the benefits associated with it.

Of the industry’s approximately 25 million data customers, nine million are already on 3G. With a presence in over 75 cities and approximately 2.5 million 3G subscribers, Telenor is leading the 3G market followed closely by Mobilink with 2.2 million 3G subscribers and coverage in 54 cities. Zong with its relatively lower 2G market share surprised everyone as it has already crossed two million 3G subscribers followed by Ufone and Warid.

Different marketing shouts and RTBs (reason to believe) were adopted by operators for 3G customer pull. Telenor took the largest 3G network claim while Zong talked about having the most advanced network; Mobilink emphasised its higher quality 3G output (of 10MHz as opposed to the other two operators’ 5MHz); Ufone focused on a high quality mobile broadband experience and finally Warid had a hard hitting campaign with endorsements from high achievers.

Although significant technological and infrastructural investments have been made by operators to build 3G adoption momentum, one of the key enablers for trial generation is 3G device penetration. Currently, roughly 80% of Pakistani mobile users are still using 2G devices and mobile operators saw this as a business opportunity with promising volumes.


Ufone and Telenor created a stir in the market by successfully managing to launch sub $60 3G-enabled handsets (Telenor even crossed the $40 barrier). The devices come bundled with free 3G data for three months and free social media usage.

*Price inclusive of 500MB + unlimited Facebook, Twitter, LINE and WhatsApp for three months
*Price inclusive of 500MB + unlimited Facebook, Twitter, LINE and WhatsApp for three months

As far as 3G device manufacturers are concerned, there are several in Pakistan, including Apple, Haier, Lenovo, Microsoft, QMobile and Samsung. The primary focus of these device manufacturers is in the $200-400 category apart from a few flagship product launches in the $100 category. This created a gap in the market and an opportunity for mobile network operators to launch 3G devices for the sub $100 segment, which accounts for a significant chunk of the market and where there is potential for 3G usage. Therefore Telenor, Ufone and Zong all came up with economical 3G device and bundle plans.

Ufone and Telenor created a stir in the market by successfully managing to launch sub $60 3G-enabled handsets (Telenor even crossed the $40 barrier). The devices come bundled with free 3G data for three months and free social media usage. Furthermore, the devices are well put together and took into account current industry trends by piecing together a one to 1.2GHz processor, 4.0 inch screen and 512 MB to one GB of RAM.

The off-take of operator-led devices has been quite efficient and one of the main reasons why is because customers are able to see the value of a purchase where they get a complete telecom solution in one price. The comparison in the chart clarifies the value offered by operator led 3G devices over other device manufacturers.

Along with offering value for money to customers, there are benefits for the operators as well. While some business managers may question whether operators should invest in the devices business at all, as it is an altogether different vertical, requiring heavy investment in terms of research, procurement and supply chain, telecom marketers have a different perspective. Firstly, device launches by operators act as an enabler to bring on board new data subscribers, a large chunk of whom were previously voice only subscribers. The free ‘sweetener’ benefits (free data, etc.,) not only bring these customers on board, they also result in higher ARPU in the long run. Secondly, the fact that operator led devices have a ‘network lock’ feature (the device can only work with the SIM of the operator that launched it) means that customer stickiness is enhanced and there is less of a likelihood of customer churn.

We will see more operator-led 3G devices entering the market in the future and these are likely to have more innovative bundle propositions. The new devices will probably be in the sub $70 range with a focus on specs and innovation. Operators will also offer instalment-based payments in order to make high end devices more affordable. Although these devices will not have a huge impact on the overall handset category due to lower volumes, the biggest impact will be continuous pressure on smartphone manufacturers to bring down device average selling price to better serve the bottom of the pyramid smartphone market.

Khurram Mahboob is a telecom

professional in Pakistan.

khurram.mahboob@gmail.com