Analyst: MegaFon wants to improve loyalty of data using clients

MOSCOW, Feb 13 (PRIME) – A new strategy of MegaFon, one of Russia’s top mobile operators, will focus on the lifetime value (LTV) of clients, rather than on average revenue per user (ARPU), to raise loyalty and activities of subscribers, Sberbank CIB said Monday, quoting the operator’s meeting with analysts.

MegaFon will offer value-added services with the best connection quality by the subscriber’s perception. It will be most interested in clients using data transfer services, since 27% of the company’s subscriber base secure 49% of revenue, and will stimulate users of traditional services to get involved into digital offers, as Sberbank CIB said.

The program will be revealed in May.

A new tariff of VK Mobile within the cooperation with Internet giant Mail.Ru Group, in which it has recently bought a 63.8% voting stake, will be launched in 2017.

“The synergy effect from MegaFon’s purchase of the stake in Mail.Ru Group would probably be seen at the end of 2017, and the new VK Mobile tariffs will be launched this year. However, we would not expect the tariff to influence MegaFon’s financial results significantly, as it targets a niche audience. The bigger impact would come from a merger of user data,” the bank said.

MegaFon is going to contribute to the restoration of the mobile connection market in 2017 fully. It hiked roaming tariffs in the middle of December 2016, and the same was done shortly to bundle tariffs, while its Yota’s limitless tariff was closed.

Starting from this year, incomes from mobile connection services in Russia have been falling, as a result of 2016 price wars, that’s why the company expects the market to grow less than 3–5% as of the end of the year.

Sberbank CIB thinks the mobile connection market could add 1–2% in 2017, although growth could be higher if operators impose higher tariffs.

MegaFon’s management expects the data retention laws to be delayed by at least a year, or July 2019, and a single monitoring and data storage system to be created, not on the operator level.

Most likely, connection operators will finance the fulfilment of the laws by deducting a fraction of revenue per year, but they could delegate this burden to subscribers’ shoulders.

“The management’s comments coincide with our opinion: we think the operators could manage to soften consequences of the laws and their weight on profit,” Sberbank CIB said.

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