Finnish mobile telecommunications company Nokia Oyj (NOK) Thursday introduced a new business model, the Nokia Connect Market Expansion Toolkit, and said it will start licensing Nokia Prepaid Tracker.
The company said it aims to strengthen its offering for new growth markets by using the Nokia Connect Market Expansion Toolkit for profitable market expansion.
It will also start the licensing of its Prepaid Tracker to global system for mobile communications, or GSM, and wideband code division multiple access, or WCDMA, device manufacturers and GSM and WCDMA operators.
Nokia estimates the number of mobile subscribers to grow to three billion in 2008. As around 80% of this growth will come from new growth markets, the importance of these markets will continue to increase, the company said.
Nokia expects that Asia-Pacific and China will account for 50% of the next billion subscribers.
Edited Press Release
The company said it believes the right combination of mobile phones, network solutions, services and a favorable regulatory environment is essential to spreading the benefits of mobility.
The key is to reduce the total cost of ownership to the consumer, whilst ensuring a profitable, and thus sustainable, business model for operators and vendors, Nokia said.
Large part of expansion of mobile services in new growth markets comes from lower-spending customer segments. With the new Nokia Connect Market Expansion Toolkit, operators can increase their revenue by reaching out to these people, without affecting the service expectations of their existing customers, the company said.
“The Nokia Connect Market Expansion Toolkit allows operators to develop diverse service offerings at different prices to meet the needs of both current segments and new, lower-spending ones in a profitable way. Networks are typically dimensioned according to their busy hour usage, often resulting in a great deal of idle capacity at other times,” said Rauno Granath, director, New Growth Markets, Networks, Nokia.
“This new, more affordable service offering made possible by Nokia encourages lower spending customers to make their calls outside of peak hours, thus resulting in more efficient use of resources,” he adds.
The Nokia Connect Market Expansion Toolkit allows the shared use of resources in the radio network. Voice channels can be set to use adaptive multirate half-rate or full-rate depending on the subscriber type, and SMS services can be differentiated without additional traffic related expenses.
As these features already exist in the Nokia networks, operators can leverage their existing investment and attract new subscribers with more affordable services, the company said.
According to Informa Telecoms & Media, over 70% of all mobile subscribers in new growth markets are prepaid customers.
To better serve their needs, Nokia last year introduced its innovative Nokia Prepaid Tracker solution that automatically updates the users’ phones with their up-to-date prepaid balance and call expenses.
Operators with the Nokia Intelligent Network have previously been able to use the technology.
Now, Nokia has opened the possibility to seek a license from Nokia to its patented Prepaid Tracker feature to other GSM and WCDMA terminal manufacturers, as well as to GSM and WCDMA operators whose Intelligent Network is not supplied by Nokia, to offer Prepaid Tracker service to licensed terminal products.
In addition to their current account balance, subscribers can also view information on the account’s expiration date, the cost of the last call or SMS, and the amount of the last prepaid recharge.
The Nokia Prepaid Tracker is provided to operators as a software implementation. The solution helps operators to differentiate their services, thus reducing churn. In fast growing markets, where prepaid subscribers far exceed postpaid, innovations such as the Nokia Prepaid Tracker can help operators create a competitive advantage, the company said.
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