Report: Sponsored data gains traction among Nigerian telcos

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Sponsored data, the business model where third parties companies buy mobile data from mobile phone networks for use by their consumers or employees, is on the upswing in Nigeria, a new report has shown.

Sponsored data provides a useful business model for bringing mobile data to new users in emerging markets and to new device types —according to the Strategy Analytics Wireless Operator Strategies (WOS) service report, “Measuring the Success of Sponsored Data.”[blockquote right=”pull-right” cite=”Strategy Analytics Wireless Operator Strategies (WOS) service report”]”With sponsored data business models, third party companies like consumer brands, web stores or enterprises can pay the mobile operator for data used by consumers or employees to access their content in a toll-free model, or can offer data rewards like loyalty points.” [/blockquote]

With sponsored data business models, third party companies like consumer brands, web stores or enterprises can pay the mobile operator for data used by consumers or employees to access their content in a toll-free model, or can offer data rewards like loyalty points.

The business model is growing in Nigeria and several emerging market economies like Brazil, China, India and Indonesia.

Sponsored data use cases gaining traction today in emerging markets and they range from advertising, free access to online commerce apps, games and app stores, free access for banking apps, to support for bring-your-own-device (BYOD) by enterprises, education and healthcare.

“China has been a particularly strong market for sponsored data, with AsiaInfo a key platform vendor supporting the market growth. China Telecom, China Mobile, China Unicom are all supporting sponsored data offers, with sponsors like Alibaba and Baidu focusing on growing traffic and users to their online stores and apps”, the report says.

Already, leading operators evaluating or launching sponsored data include AT&T, Airtel, Millicom, Telefonica, Telenor, Telkomsel, TIM Brasil and Vodafone; Facebook’s Internet.org is looking to expand its partnerships with operators to create a free data on-ramp to the mobile Internet in emerging markets, Strategy Analytics says.

“Operators are starting small to prove the value of sponsored data use cases for their particular market and find brands with interest. Momentum will build in 2015 as operators and sponsors test what works best and build their strategies for sponsored data. For operators, this needs to be part of a broader move to upgrade systems to support more flexible, agile, and scalable new business models with partners in over-the-top (OTT) services and the broader ecosystem as mobility becomes more central to consumers and enterprises alike”, Phil Kendall, Executive Director, Wireless Operator Strategies, says.

Also commenting, Susan Welsh de Grimaldo, Director, Wireless Operator Strategies adds that, “wearables, connected car and IoT – these device categories will definitely benefit from new thinking on how data connectivity is offered. Sponsors can be the device makers or other brands, and free data use can even be embedded in specific aps for the devices. People will not have to worry about setting up a wireless account for each new device, and brands like insurance companies, services, and sports drinks will have a new way to reach their target customers.”