Dynamic Tariffing™ Systems
An insight into Digitata and their Dynamic Tariffing™ System success
Writer Emily Jarvis
Project manager Nick Norris
Digitata Limited boasts a strong mobile telecommunications and revenue management background. Set up in 2008 with the specific purpose of implementing a Dynamic Tariffing™ System (DTS), Digitata has seen revenue double in the past three years. The business is made up of a team dispersed across South Africa, Australia, New Zealand, Spain, Sweden and their headquarters in Mauritius. Africa Outlook spoke to CEO Ted Bartlett and his CTO Tim Fourie to gain a better grasp of the company’s ethos.
Since its inception, Digitata has worked closely with African mobile giant MTN. Digitata was also selected by Ericsson AB, a leading provider of telecommunications solutions globally, to provide core technology for Ericsson’s Dynamic Discount Solution (DDS). Mr Bartlett states: “We continue to work closely with Ericsson, to extend our customer reach, but increasingly operators are sourcing from the company directly, rather than going through partner channels or larger organisations.”
Remarkably, Digitata has only 28 members of staff across all countries of operation. “Our core business is to understand operators and their revenue, how consumers respond to pricing, and what needs to be done to apply a yield optimisation tool to the telecoms markets. with our expertise focussed on these factors, we do very little in the way of administration.” Digitata outsources other services including second and third line support, software development and code level fixes to their partner company, Rorotika technologies. Mr. Bartlett stresses: “Our business is knowing, understanding, consulting, setting up, managing and launching DTS and Yield Optimisation.” Having a small team has its internal benefits, and makes managing a global team and meeting up regularly throughout the year much more achievable.
What is Dynamic Tariffing™?
An explanation on the inner workings of the Dynamic Tariffing™ System provided insight into how Digitata grows their business. “The concept is incredibly simple. The price that you pay for a commodity is largely determined by the availability of said commodity, and also the willingness of the consumer to pay a price for it”, explain s Bartlett. For example, the price of train tickets can vary enormously depending on the time of the year, and on peak or off-peak travel; in other words, it varies depending on the demand for travel. “If it’s n ot constant, then we have to match demand in order to achieve what we call the greatest ‘yield’.” using this method, the Dynamic Tariffing™ System measures the response of customers and acts to change customers’ calling patterns in order to maximise the usage of the network. “We are able to look at the subscriber spend on the operator’s network, and offer the subscriber value, while giving the operator the best return.”
Extracting network and revenue data from the network, the Dynamic Tariffi ng™ System analyses that data and uses it to calculate an optimum price-per-cell-per-hour for the network, which is published. What’s more, anyone on the network can view this information.
Introducing New Concepts
The biggest challenge is introducing a new concept into the market. The idea that reducing prices when spare capacity exists will not automatically erode operator revenue often meets resistance. In reality, subscribers call for longer making up the difference and even exceeding it, as they are getting better value for their money.
However, persuading operators that managing their commodity in a more sophisticated manner can lead to more value is not easy, as Bartlett explains: “You have to convince everybody involved. Educating the market on the outcome, possibilities and options of taking this up is difficult.”
CTO of Digitata, Tim Fourie, brought a second challenge to light: “The biggest challenge for me has been product acceptance. There are multiple stakeholders who you have to satisfy simultaneously in order to get to the point where we can provide DTS. We aren’t just talking to one customer; it’s a solution that touches every aspect of the network.” Africa has been the company’s strong point, testament to where their service-education began. Both Bartlett and Fourie believe that as the product gains more and more acceptance in the market, they can grow their offerings.
Red Herring Award
One of the three mentionable awards that the company has won is the Red Herring Top 100 Asia Award. Although it seems abundantly obvious that Digitata’s base of operations is not in this continent, a decision was made that their HQ in Mauritius was close enough to Asia to be included. As a result, they are the first and possibly only African company that will ever receive this award. Mr Bartlett says the company is extremely proud of this achievement: “Further to this, we were also invited to the global awards, where we received the Red Herring Top 100 Global Award, an even greater accolade.”
Customer Satisfaction and Projected Growth
As a business, Digitata is most interested in customer satisfaction, which is at the forefront of their services. Reporting a constant compounded growth of 25 per cent a year, and an average growth of 12 million subscribers per year, the company has plenty to boast about. “We will be moving into new countries and have a new product lined up for this quarter. Additionally, we anticipate moving into further countries by the middle of the year.” They hope to increase their direct customer base and networks, as the number of operators in Digitata’s market reach is also on the rise. “We believe that the market education is reaching a tipping point. We are seeing change, with companies now seeking solutions from us, which is hugely positive. We have also seen the competitive landscape changing dramatically.”
The company has seen their systems being deployed in around 24 countries globally and the DT subscriber numbers have increased to around 75 million. Digitata’s objective is to take that number to 100 million subscribers during the course of this year. “In terms of subscriber numbers, we are pushing more aggressively on that front, because this means we can grow our own subscriber base as well.” Exciting things are in the offing for this company as they also revealed the upcoming release of a completely new but symbiotic product, being introduced into the market this quarter. “At the moment, our intention is to put ourselves above the parapet of Mobile World Congress.” They will be making a full announcement soon.
A Wealth of New Opportunities
Fourie explains that new opportunities are coming through to Digitata’s portfolio, accompanied by the ambitious 100 million subscriber target: “We are significantly ahead of our nearest competitors. We have a trust relationship with our network operators, this is imperative.” Bartlett interjected with a concluding statement: “When an operator offers you the opportunity to price their commodity effectively, when control and revenue is deriving from their assets, it is imperative that we maintain a track record of integrity and performance.” The main reason for the company’s success is this underlying trust in Digitata as a company. This trust is central to the company’s daily functioning, and makes them a strong contender in the Mobile Solutions marketplace.