Feature Phones: Why MNOs Should Stop Servicing Them
For mobile network operators, feature phones that rely on the legacy of 2G are no longer worth servicing. With the mass usage of 4G and introduction of 5G, and their abilities to power mobile broadband services, there’s no longer the same reason or incentive to keep providing coverage for 2G featurephones when that spectrum could be re-farmed into more profitable 3G, 4G and5G.
This effectively means switching off service to older feature phones that still rely on 2G. Although many customers hold onto legacy devices out of habit or to spend less on mobile costs, the returns of continuing to service them are no longer worth the effort for MNOs.
It’s time for MNOs to stop providing coverage feature phones and migrate customers over to more robust and serviceable smartphones. Keep reading to find out why it's in MNOs best interest to stop servicing feature phones.
Feature Phones: What’s the Fuss?
Feature phones are mobile devices that still retain the structure and layout of older generation mobile telephones, with press buttons and non-touchscreen displays. They generally have a rudimentary embedded operating system and provide basic voice call and text messaging functionalities. Some also provide limited multimedia and internet capabilities.
While these mobile devices were once the standard in the mobile communications industry, they’ve become something of a legacy roadblock in the advancement of mobile service provision and profitability, particularly in developing markets where the need for digital transformation is most urgent.
Should MNOs Stop Offering Coverage for Feature Phones?
In many developing markets, feature phones have been the “bread and butter” to many lower-income customers and underserved businesses. Their widespread availability and ease of use have effectively kept customers hooked with no intention of switching to a smartphone, either due to a fear it will be too complex or because of financial constraints.
However, despite their utility, feature phones offer very little to MNOs in terms of profitability. They predominantly run on 2G which, across the globe, has largely been decommissioned to make more room for 4G and 5G. 2Gtechnology is not data capable and doesn’t assist with digital transformation or in developing the digital economy.
In a bid to preserve and better utilise radio frequency spectrum and improve net revenue, MNOs should actively encourage customers to migrate from older legacy devices to newer, more updated smartphones by stopping the servicing of feature phones altogether.
What Are The Benefits of Transferring Customers Over to Smart Phones?
Existing feature phone users may initially be hesitant or frustrated about being forced to switch to using a smartphone, but MNOs can leverage this opportunity to improve their customer experience and reinforce customer retention.
Customers who migrate from feature phones to smartphones will also be migrating from 2G to 3G and 4G. The spectrum release that comes with leaving 2Gis then re-farmed into 3G and 4G, meaning customers will be buying and using more data. Their data usage increase will increase the net revenue of MNOs.
On top of this, customers will have access to a broader range of capabilities with a smartphone, beyond voice and text messaging. Customers will be able to use an online suite of services such as mobile wallets and mobile money transfer and payments, all of which MNOs can offer as a service to their customers.
MNOs can further expand their service offerings to new smartphone users by offering airtime and data advances, ensuring customers are never left without connectivity when they need it.
MNOs who stop servicing feature phones may feel hesitant about the possibility of losing customers, but customers who migrate will quickly realize the benefits and improved products and services they will be able to access that come with smartphones. Ultimately, eliminating coverage for feature phones will benefit both MNOs and the customers they serve.
Airvantage is one of the largest service providers to mobile network operators across Africa, specializing in services such as:
● Advanced airtime and data lending
● Mobile wallets and mobile money lending
● Handset financing
● Financial identity as a service (FiDaas)
Our extensive credit access means that we take on the risk while you reap the benefits for your business.
If you’d like to learn how Airvantage can help you to expand your current service offerings to your customers to increase your bottom line, book a consultation with us and we’ll help you get where you want to go.