Accra, 23 February 2009.

Mobile telephony prices varying with network load – yield management made transparent

The mobile telephony marketing idea of the day is the MTN price zoning concept I witnessed in Ghana. According to which cell you are attached to, a message on the handset displays a discount rate. On lightly loaded cells the discount can go up to 100% (although I never saw it at more than 50%) and on the heavily loaded ones there is none. Making network loads transparent to the users through a price signal a great way to both shape traffic, take advantage of available infrastructure to provide cheap traffic and charge premium prices to the most demanding users. I have never before seen yield management made so transparent – so refreshing compared to the elaborate pricing schemes designed to play that role in more subtle and more annoying ways.

Here is an extract of the press release from MTN Ghana on MTN Zone service launch in June 2008 :

MTN Ghana has announced the launch of a new Innovative service named MTN Zone. The service gives its Pay As You Go subscribers the opportunity to enjoy up to 100% discount day and night on calls they make to other MTN Ghana subscribers and runs on the per second billing plan. MTN Zone subscribers have a flat tariff on all MTN to MTN calls when they register and subsequently receive messages that display dynamic discounts they will enjoy at any point in time.

In order to enjoy the benefits of MTN Zone, existing and new MTN prepaid customers simply need to register for the service by entering *135*1# and pressing the send or ok button on their handset. Alternatively, they could send 1 to SMS short code 135. Registration onto MTN Zone service is currently free of charge. To activate the cell broadcast functionality on their handsets, customers must enter enter * 135*4# and follow the instructions, this process is unique for each handset module. The cell broadcast feature when enabled, gives MTN customers the opportunity to see the dynamic percentage discount they will enjoy when they initiate a call at that time and the discount will be applicable throughout the duration of the call.

“We are excited at what the team here at MTN Ghana has been able to provide after thorough research and development. Discerning Ghanaians want the most cost effective and exciting means of communicating with their family and friends and we are proud that as a team we have been able to crack this motivation and demonstrate our leadership in innovation and superior customer understanding. This new service empowers our customers with more, choice and control over their cost of making calls. The excitement this service has generated within one week is unparalleled in the industry in Ghana. As usual we will lead the market in innovation and others can follow”, says George Kojo Andah, Chief Marketing Officer.

I believe that they have good reason to be proud of this innovative service. It probably requires some custom billing system but I believe it is a great idea – maybe I should write a proposal for our marketing department. The billing people might be horrified though…