Thursday, January 26, 2006

JupiterResearch: 3's WePay

Thomas Husson posts at the Jupiter Analyst Weblogs about 3 UK's (a mobile operator, owned by Hutchinson) "WePay" scheme that "offers to reward pay-as-you-go customers with a cash credit of 5p for every minute of a voice call and 2p for every text." Referring to some skepticism in the press, Husson notes "there are risks indeed." He states:

it is interesting to look at the Italian market where "Tre" has launched the same kind of offer (form of discount or credit bonus for incoming off-net traffic). As far as I know Vodafone and Telecom Italia would love to have the same ARPU than 3. That being said, the Italian market is specific in the sense that in Italy, many customers are equipped with multiple SIMs from multiple providers and operators facing the issue of maintaining leadership in terms of active service usage. So it encourages customers to advertise their new 3 number with familiy and friends so that 3 becomes thier main service provider.
Husson finds that it is "pretty clever all the more as 3 will also benefit from interconnection revenues for calls terminating in the 3 network," but will wait and see if it takes hold in the UK market.