The digital revolution has not only transformed the telecom business environment but has also reinvented customer interests and needs. Customers today, especially in the telco environment have become much more tech-savvy and are actively seeking services that suit their increasingly digital lifestyle, from the way they recharge airtime, to the way they pay their bills. The accelerated penetration of smartphones and the proliferation of the internet across the world has transformed the mobile device into an instrument of utmost ease and convenience.
Telecom operators can significantly boost their revenue and retain more subscribers by moving beyond the obsolete scratch card system for airtime recharge to electronic top-up in the prepaid market segment. Even though scratch cards have played a vital role in the distribution of airtime over the past decades, it is pertinent for the telcos to switch to a digital approach. This is also better suited to the needs of the subscribers and is on the same wavelength with the fast-evolving telecom industry.
In addition to providing value-added services like mobile data, telcos are taking measures to ensure fast and efficient services for their subscribers to gain a competitive advantage in the market. Hence, the digital transformation trend in the telecom industry and fast-evolving customer interests have made the scratch card system obsolete. As opposed to the scratch cards, digitizing the airtime recharge process allows telcos to cut down OPEX and boost revenue.
Eliminate production and distribution costs
The complete cost of generating, printing, transporting, warehousing, distributing, and managing the inventory of scratch cards can be overwhelming. In addition to that, telecom operators also incur a recurring cost of maintaining a constant supply of prepaid scratch card inventory at each distributor or reseller to provide airtime to subscribers. However, with electronic recharge, the logistical and operational costs are minimized as the physical inventory levels dropdown.
Real-time sales data through digital channels
With scratch card sales, telecom operators are not able to see the impact of their reseller campaigns in real-time. The sales data and reports generated in real-time enable telecom operators to not only forecast demand and future trends but also plan their promotional campaigns efficiently. By digitizing the sales and distribution of airtime recharge, telcos also have the visibility of top resellers to incentivize or reward them under the loyalty program.
Low stock alerts
For resellers and retailers, prepaid airtime scratch cards are just one commodity that they offer among the myriad of other products available in their stores. Thus it is often difficult to ensure the timely refilling of each airtime denomination. However, with an electronic recharge system, the telecom operators have visibility into the inventory levels or sales of the resellers in their region. Due to this, the bottlenecks in the restocking process are reduced substantially as the telecom operators can manage their inventory levels remotely for their entire distribution chain.
Low risk of theft or damage
Security is one of the most common concerns for telcos when it comes to prepaid scratch cards. Theft or misuse of cards is prevalent in the distribution of scratch cards and forces resellers to either keep a low stock level or move towards keeping lower denominations to minimize their risk. This may result in a lower average recharge value for them. As opposed to this, there is little to no risk of theft or damage to the physical inventory in the digital airtime top-up.
End-users may have to wait in long lines to purchase scratch cards or may get turned down due to the unavailability of scratch cards. In comparison, the process of recharging digitally is time-efficient and requires very little effort from the subscriber. Electronic top-up also allows for flexible denominations which provide more options to the subscriber.
Effective campaign management
With printed scratch cards rolled out and available in the market, it is an intimidating task to manage region-based promotions. On the other hand, with a digital platform, it is easier for telcos to control and manage commissions to resellers or promotions to subscribers from one platform.
Due to the high distribution costs and the lack of a digital and synergized platform, the scratch cards are no longer used for airtime recharge in most developed economies. Thus, it is imperative for telcos to enhance user experience as well as maintain a competitive edge by adopting sustainable and cost-effective measures.