Case Studies Case Studies

Case Studies

Digitata’s Dynamic Tariffing System (DTS) was first trialed in MTN Swaziland by Rorotika Technologies in early 2007. The uptake of the service proved to be a lot higher than was expected, and the operational and financial results were improved by significant margins in the pilot area. MTN Swaziland subsequently launched the product commercially in August 2007. Digitata’s Dynamic Tariffing Engine (DTE) currently operates commercially in various networks in Africa, Asia, the Middle East, central America and the Caribbean with an active “Dynamic Tariffing” (DT) customer base of tens of millions of customers.

MTN Swaziland

“Dynamic Tariffing System” (DTS) was first piloted in February 2007 in MTN Swaziland by Rorotika Technologies. The Kingdom of Swaziland is a landlocked country in Southern Africa, bordered to the north, south and west by South Africa and to the east by Mozambique. At the time of the pilot, Swaziland had approximately 1 million inhabitants. MTN Swaziland is the country’s monopoly mobile operator and had 268,000 customers in early 2007.

MTN sought to find a way of making mobile telecommunications more accessible to the country’s population, while reducing congestion levels in the network, improving the network utilization, increasing ARPU and maintaining revenue.

Two areas representing 13% of the mobile network were chosen to pilot DTS.

MTN customers in the pilot area were offered discounts of up to 90% during periods when the network capacity was under-utilized. The customers who had flexibility to make their phone calls at times of the day when the MTN network was under-utilized benefited from the deep discounts offered by the system.

This resulted in a more evenly distributed network traffic profile in the pilot area across the day. After the end of the 5-week pilot, 85% of customers in the pilot area migrated to the DTS service. These customers generated 81% of all mobile originated traffic and only 1.3% of registered customers decided to leave the service during the pilot period.

The peak traffic on the over-utilized cells in the area was reduced by 14%, while the network utilization was increased by 11%. Mobile originated revenues increased by 9% in the pilot area and the ARPU of the registered customers increased by 4.8%. MTN Swaziland launched the DTS service commercially on a partial basis in August 2007 and embarked on a full national launchin June 2008.

MTN Uganda

Uganda is a landlocked country in East Africa with an estimated population of about 31 million people. It is bordered on the east by Kenya, on the north by Sudan, on the west by the Democratic Republic of the Congo, on the southwest by Rwanda and on the south by Tanzania.

MTN Uganda, one of four very competitive mobile operators in the country, carried out a pilot of a“Dynamic Tariffing” (DT) product offering using Digitata’s “Dynamic Tariffing Engine” (DTE) in Gulu, in the northern part of the country starting in March 2008. The pilot proved to be a big success, attracting 40,000 new subscribers in just over three months.

MTN named their DT service “MTN Zone” and launched commercially on, 31 July 2008, with the objective of attracting 50% of their 3 million customers to the new service in 6 months.

After only five days after the launch of the pilot, over 800,000 customers registered for the MTN Zone service! The average discount received by customers during this time was70% during the day and 99% in the evenings. Twelve days after the launch, Eric van Veen, COO of MTN Uganda said: “In terms of product uptake this is the best performing in the history of any product launch in Uganda and most likely the region…our target was to reach 50 per cent of the base within 6 months, but we should reach that target over the weekend, an amazing response to an amazing product.”

By October 2008, the service had attracted over 2 million subscribers, representing 60% of the customer base, with a 70% increase in call volume since the introduction of the service. Thetraffic increased from 1.7 million minutes to 3 million minutes since the launch of the service, with customers receiving an average discount of 45 to 50% % during the day and 95% in the evenings.

News article, 05 October 2008: http://newvision.co.ug/D/8/220/653082

MTN Ghana

Ghana is a country in West Africa with an estimated population of 23.8 million people. It borders Burkina Faso to the north, Cote d’Ivoire to the west, Togo to the east and the Gulf of Guinea to the south.

MTN Ghana, one of the country’s five mobile operators launched their DT service, named “MTN Zone”, in June 2008. By the end of 2008, their subscriber base had increased by 60% to 6.4 million subscribers. According to MTN, this growth is attributable to the success of “MTN Zone”.

Financial Results Report: http://www.mtn-investor.com/reporting/prelim_08/pdf/booklet.pdf

Customer Feedback

Dynamic Tariffing for me is the most powerful pricing innovation since the inception of mobile telecommunications, with a capacity to transform the fortunes of operators in very competitive markets, especially in emerging markets. Having managed and experienced it in different markets, I call it the “Universal Soldier” because executed effectively it delivers Subscriber growth, ARPU Stimulation, Subscriber Retention and Loyalty, and is a strong tool for fighting Price Wars. Problem is, most executives don’t understand it or know what they can do with it.
—Saint Hilary Doe-Tamakloe (former Manager: Business Analytics and Pricing – MTN Ghana)