LIME drops Cross Network Calling rate to JA$6.99 to kick off a 3 year Battle for Mobile Market Dominance

On Thursday June 14^th 2012AD at 2:00pm, LIME held a Press Conference to announce something special on the horizon, a coming surprise that was pre-announced in The Jamaica Gleaner. As the title says and has been mentioned in the Media including on our blog in Kelroy’s article LIME Jamaica slashes mobile calling Rates, LIME has truly done as it has promised, slashing Voice Calling Rates as to Historic Lows as follows:

1. $1.99 per minute for on-net Calls for Postpaid mobile customers
2. $2.99 for minute for on-net and International Calls for Prepaid and Postpaid Customers
3. $6.99 per minute for other network numbers, inclusive of Telecom Provider Digicel and Landline for both Prepaid and Postpaid

The new Rates are part of a Calling Plan called Talk EZ that now has Jamaicans rushing LIME stores islandwide and JA$999.99 Alcatel phones selling like hot Johnny Cakes. This rate drop is a first in the Telecoms Industry and took effect on at 12:01am on Friday June 15^th 2012AD.To activate the Talk EZ plan is a simple matter; dial the USSD (Unstructured Supplementary Service Data) Code of *123*1#.

Akin to the JA$8.99 Flat Rate Calling Plan for Prepaid, customers will be given a choice to try out the service for thirty (30) days, possibly using *123*0# to deactivate the service after the kick-the-tyres period is up. And the aggressive marketing Strategy, inclusive of LIME’s recent Rebranding exercise as described in Kelrtoy’s article LIME Jamaica Debuts Epic Brand Campaign, has been the work of Grace Silvera Marketing Manager at LIME, quote: “This is an aggressive move and we promised it. This is what people were waiting for”.

Minister of Science, Technology, Energy and Mining Phillip Paulwell, also weighed in on the surprise shock attack of lower Voice Calling Prices, giving a decent quote to the Jamaica Gleaner on Friday June 15^th 201AD thus, quote: “Competition is going to be fierce now and the market is going to me more robust and attractive for others to enter”.

He also stated that Data prices could be lower, an interesting comment in light of LIME’s recent reduction of its Data Plans since Tuesday May 1^st 2012AD as shown below:

Since then I’ve published a slew of articles on how to access Data Services in Jamaica, namely:

1. How to get 2G or 3G Internet on your Mobile Phone in Jamaica
2. How to Access LIME or Digicel’s 3G Internet using an unlocked Huawei E1556 Modem Dongle or Nokia Modem Dongle
3. How to Set Up a Prepaid or Postpaid Blackberry Plan on your BB for LIME or Digicel

Really though, it’s thanks to negotiations with the OUR (Office of Utilities Regulation) since February 2008AD, with which Digicel strongly voiced opposition. At those preliminary negotiations, an interim rate of JA$5.00 per minute for Cross Network and International Calling was agreed upon.

Recently, it was officially announced by the Utilities Regulator on Tuesday June 5^th 2012AD. The OUR is currently modeling the long term effects on the Telecom Sector (Matlab 6.0 Simulation perhaps?!), with the intention to announce the permanent Rates on Sunday July 15^th 2012AD.

Once this Rates take effect, Digicel’s  JA$8.99 Flat Rate Calling Plan for Prepaid in my article Digicel Introduces One Rate Calling for $8.99 in Jamaica and the Anywhere Calling Plan for Postpaid  as per my other follow-up article Digicel intros the Anywhere Plan for Postpaid will be nullified; they too will have to have the same exact Calling Rate as regulated by the OUR.

Hopefully too on that date, word will also emerge of not only the new changes to the Telecoms Act, but also the new Telecom Regulator as long expected in  New Telecom Act Coming for Jamaica – Providers surprised with their Own Regulator. MNP (Mobile Number Portability) should also be a part of the new coming paradigm in the Telecoms Sector.

Thus clearly what LIME is doing is genius. Knowing that the Voice Calling Rates are pretty much going to be JA$5.00 or lower, they have pre-empted the final decision of the OUR and pitched their offer. Thus LIME is trying to gain as many customer as quickly as possible as LIME’s Managing Director Gary Sinclair pointed out, quote: “This promotion is meant to gain a lot of market share as quickly as we can”.

LIME’s Mobile Network is composed of customers as follows:

1. 400,000 Prepaid customers
2. 50,000 Postpaid subscribers

From the numbers above, it can be seen that Postpaid subscribers consists 11% of LIME Customer base. As Postpaid (called Prepaid in the US, Canada and UK) and 2-Year Contract is the bread-and-butter of most Telecoms Providers, these Calling Rates can only make LIME Postpaid grow. Thus they need to put more emphasis on Postpaid and not prepaid, thereby avoiding the mistakes Digicel has to be now correcting to adjust to this new coming Regulated Telecoms Sector paradigm.

This when compared to Digicel’s over 3 million subscribers, of whom 90% are Prepaid indicates the level to which the up until now unregulated Telecom Sector had been heavily skewed towards new entrants into the market, namely Digicel, becomes clear. Customers, now rushing LIME Stores in a mad bid to purchase LIME phones and SIM Cards on sale to take advantage of the new Rates…….which when the OUR Study is completed, may trend lower and which Digicel will be forced to adopt.

This call drop is in addition to LIME’s recent offers over the months of a lower 3G Data Rates since Tuesday May 1^st 2012AD. LIME has also made the offer of lower Rates in their LIME XL Campaign, a clone of Digicel’s Gimme 5 sans the International Calling and the freeness starting after 3 minutes or 3 texts respectively.

Hopefully, LIME will take advantage of this opportunity and expand and upgrade their 3G Network islandwide  to HSDPA (High Speed Downlink Packet Access) Release 7 Network and thus bolster their 3G Data Service offerings, as the distraction of having to market Mobile will be resolved by Sunday July 15^th 2012AD. Ditto too on the expansion of their VAS (Value Added Services) mainly:

1. LIME TV based on DVB-H (Digital Video Broadcast – Handheld) Platform
2. LIME TV based on IPTV platform built by Juniper Networks and powered by content from Avail-TVN, which is being tested successfully in Barbados

Interestingly by MNP (Mobile Number Portability), which allows subscribers from once Telecoms Network to go across to another Network and still keep the same number, was also announced by Philip Paulwell for a December of 2012AD debut. This as recent adjustments to the Telecommunications Act in May 2012AD allow for this facility that has been around in the Global Telecom Space since Singapore introduced the concept in 1998.

Minister Phillip Paulwell Explains it best, quote: “The law that we passed recently allows now for number portability to be effected, and we intend to have that done during the course of this calendar year, and it gives me, the minister, powers to effect it, and right now I am working with a team to make sure that we have the right systems in place. There has to be an infrastructure that would allow for the customer to seamlessly move from one network to another”.

If Digicel problems seem bad now, when the New Telecom Regulator and MNP is introduced, subscribers swapping networks to take advantage of the latest deals will become commonplace. Note the emphasis on subscribers; MNP most likely will be targeted at Postpaid subscribers, making being Postpaid attractive and thus boosting the adoption of this very reliable and hassle-free service.

Stay tuned for more on this development come Sunday July 15^th 2012AD when all Telecom Providers, including Digicel, will have to adopt the new Flat Rate Calling tariffs in this Battle of Attrition for Mobile Market Dominance.