Ooredoo Kuwait is banking on zero-rated content to help it win back customers in what has become a fiercely competitive market.
The mobile operator is not charging customers for the data they use with over-the-top services such as WhatsApp, Skype and Viber, following a growing trend that some have criticised for being in contravention of net neutrality principles.
Ooredoo Kuwait COO Hani El-Kukhun told Reuters that the company started to offer free access to OTT services in many of its mobile data plans in August, as part of tactics to win back market share. He said the move would help to attract more subscribers and ultimately persuade them to use more services and thus boost overall ARPU.
"In Kuwait, market penetration is at an all-time high so the key is here how you get your customers to spend more on data," he said. "You either join the OTTs or you fight them, so we embraced them fully," Kukhun added.
Reuters noted that voice and text revenues of operators in the Gulf have been particularly hard hit by the growing use of OTT apps. Ooredoo Kuwait has also faced challenges from rivals Zain and Viva Kuwait, with the latter introducing some aggressive prices.
Ooredoo Kuwait is far from alone in offering zero-rated content. Etisalat of the United Arab Emirates is another operator within the Gulf Cooperation Council (GCC) to have adopted this approach, in July teaming up with Wikimedia Foundation to launch Wikipedia Zero across its 19 markets in Asia, the Middle East and Africa.
In January this year, Etisalat also launched a prepaid promotion that offered free access to Facebook, WhatsApp, BlackBerry Messenger and Twitter.
However, zero rating has been a controversial topic, with some claiming that it violates the principle of net neutrality as it is a form of price discrimination that favours particular applications.
Indeed, Facebook encountered considerable opposition in India to its internet.org initiative that offers free access to various online services on mobile phones. The free basic services are now available in 19 countries.
Organisations such as Facebook and Wikipedia insist that free content initiatives are essential to enable more people in developing markets to get online using mobile devices.
Speaking at Mobile World Congress in March 2015, Wikipedia founder Jimmy Wales said it's a win-win situation: operators benefit as people are tempted to use more of their services and drive traffic, and users benefit as they gain access to the same online services that are available to everyone globally.
- see this Reuters article
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