Unleashing Operator "Branding" Through Digital-Based Prepaid Services

In the midst of stagnant industrial growth, telecommunications operators continue to seek new breakthroughs through their products/services. Experienced in failing to develop a digital business, since last year one by one operators have started to enter application-based prepaid card services.

In Indonesia, this service may be considered new because the way it works is very different from the way people usually buy prepaid cards. All activities from card ordering, number selection, registration, to package purchases are carried out through the application.

This service was first launched in Indonesia by Telkomsel in October 2019 with the brand by. U. A few months later, a similar service SwitchMobile also present in the market. Switch Mobile is Smartfren's newest prepaid product.

In addition to the two operators, XL Axiata (XL) will enter digital-based prepaid services in the near future. Based on the information collected DailySocial, XL will enter with the brand Live. On.

Live.On application is now available on Google Play, but not yet officially operating commercially. According to our monitoring, XL has opened an official Live.On store on Shopee for purchasing starter packs.

XL did not provide any comments regarding this matter. However, our sources say that XL collaborated with Circles.Life to build Live.On. The Live.On app link on Google Play is similar to Circles.Life.

Circles Life is a digital telco startup (MVNO) with operations in Singapore, Australia and Taiwan. Circles Life has indeed planned to expand to Indonesia since last year. It is not yet clear what form the partnership will take between XL and Circles Life.

Embracing youth with "refreshment"

The move to develop a digital prepaid business indicates that cellular operators are starting to seriously target the youth segment through e-commerce Branding and a different business model from its predecessor mobile products. 

Operators strive to provide products that can be personalized according to user needs. This product is considered suitable for young people who tend not to want to be dictated to enjoy services.

Previously, former President Director Telkomsel Emma Sri Hartini had mentioned that Telkomsel has been established for 25 years and is seen as an old brand. The launch of by.U is considered to be a "refreshment" step to embrace Generation Z without annibalizing the product Existingthem, namely simPATI, AS, and Loop.

“Gen Z don't want to regulate their products, they don't product-driven. In contrast to so far the products that already exist indrive by operators. Now, by.U can be customized according to user needs," said Emma.

Contacted separately, President Director of Smartfren Merza Fachys said the same thing. According to him, he wants this mobile brand [Switch Mobile] to be recognized as a new product in the market without having to be associated with a brand Existing smartphone.

"Currently, our customers are mostly in class C and D. With this Switch, we want to aim high market in grades B and C," said Merza.

Get out of the price war

Furthermore, Merza, who is also the Deputy Chairperson of the All-Indonesian Telecommunication Providers Association (ATSI), admitted that the telecommunications industry is starting to move towards digital prepaid services. The market is waiting for Indosat and Tri Indonesia to enter similar services.

Actually, the launch of prepaid products is commonplace. Each operator has more than one cellular product that targets different market segments. However, digital-based prepaid products can be a new strategy for operators to get out of the price war that has been going on for a long time.

Digital prepaid services promote brand and product novelty without being associated with telecommunication companies. According to Merza, this service can open up opportunities to compete in two market segments, namely the affordable and premium markets.

After the era of failure of e-commerce, e-wallet, and OTT, operators are still trying to find the right business model to become an operator. digital telco (digico). However, it is not yet known whether this strategy can have a positive impact on the growth of the telecommunications industry. Moreover, the space for cellular subscriber growth in Indonesia is increasingly difficult.

"To play in the product Existing, operators can no longer raise prices, customers can run away," he explained.