Zero-rated programmes have helped drive digital adoption in Sub-Saharan Africa by giving operators a way to overcome affordability challenges and show users the value of data, Millicom CCO Raul Martinez said.
The executive told Mobile World Daily there are many challenges that prevent users from accessing the internet in Sub-Saharan Africa, including both coverage and cost constraints. He said uptake of traditional forms of internet connectivity such as fixed broadband and Wi-Fi are “negligible” due to extremely low penetration levels, leaving mobile internet as the “first and only form” of connectivity available to most people in the region.
But even where mobile coverage exists, cost remains a key challenge. Martinez explained zero-rated data is one way to tackle the affordability issue and drive both digital inclusion and adoption of data-based services:
“In our experience zero rating increases the overall adoption of internet beyond the zero-rated content, as customers continue to explore other content after the first zero-rated experience and see the value of paying for data.”
Millicom rolled out its first zero-rated program in Tanzania with Facebook in 2014, when data penetration was on average below 16 per cent in Sub-Saharan Africa. Within the first year, Martinez said Millicom was able to increase data users by 85 per cent, and converted more zero-rated users into data customers by partnering with vendors to ensure the availability of low-cost devices.
The company carried the program into Senegal and Chad, where it was able to increase data users by 37 per cent and 56 per cent, respectively, in the first year after launch.
“We need to continue to give the opportunity to customers to ‘try and buy’ data products,” Martinez concluded. “Ultimately we want to monetise data and we see zero-rated data as one way to segment the market and limit revenue dilution while driving data uptake.”