The software player's experiences suggest operators in emerging markets are warming to the 'freemium' Internet model.

Iain Morris, International Editor

March 6, 2015

4 Min Read
Opera Sees Toll-Free Data Catching On

BARCELONA -- Mobile World Congress 2015 -- Opera Software CEO Lars Boilesen is untroubled that net neutrality concerns or resistance to "zero rating" -- whereby Internet services are offered free of charge through a sponsor -- could darken his company's outlook.

The Norwegian software company's Web Pass technology allows operators to provide free or discounted data services to their customers. With Sponsored Web Pass, an advertiser picks up the charges.  As with Facebook 's initiative, of which Opera is a member, the idea is to give customers in emerging markets a taste of Internet services in the hope they will pay for more. (See Facebook Launches Free Internet in Colombia.)

App Pass, Opera Software ASA 's newest product, extends the zero rating or "toll free" data model into the world of apps, and Boilesen expects all of the 20 operators already using Web Pass to roll it out.

Figure 1: In Harmony With Zero Rating Opera Software CEO Lars Boilesen at the company's Mobile World Congress stand. Opera Software CEO Lars Boilesen at the company's Mobile World Congress stand.

The approach is controversial, however. For one thing, by prioritizing certain Internet content over rival services, it could overstep what is acceptable to net neutrality supporters. Boilesen insists that in emerging markets net neutrality is not the big issue it is in the West. "There isn't the same discussion you see in the US about the big Internet players taking over," he says.

At the same time, some operators continue to have doubts about zero rating. During a Monday keynote session at Mobile World Congress, Jon Fredrik Baksaas, the CEO of Norway's Telenor Group (Nasdaq: TELN), expressed concern that zero rating could lead to cannibalization of traditional revenues if customers take advantage of Internet telephony and messaging applications. (See Facebook Faces Operator Doubts on Tie-Ups.)

Interestingly, though, Telenor is one of the 20 operators using Web Pass and it recently became the first operator to pilot App Pass. "Telenor has launched App Pass in Malaysia, and that means customers can buy whatever plans it wants to make available," says Boilesen.

Boilesen would not comment on whether Telenor's experiences with Opera could persuade it to join, but his expectations about App Pass suggest operators are warming to the "freemium" model.

For all the latest news from the wireless networking and services sector, check out our dedicated mobile content channel here on Light Reading.

Similarly encouraging are the statistics Opera provides about the response to Web Pass since it was first launched at the end of 2012. Across the 20 operators supporting the technology, around 51 million passes have been activated so far. Besides DiGi Telecommunications Sdn Bhd. , Telenor's Malaysian business, and Grameenphone, its Bangladeshi unit, other customers include Airtel (Ghana and Nigeria), Idea Cellular Ltd. (India), Mobilink (Pakistan), Robi (Bangladesh), TIM Brasil and Vodafone India .

Moreover, the Sponsored Web Pass service, which supports mobile advertising and was introduced last year, has now been deployed by ten operators, including Mobilink, TIM Brasil and Vodafone as well as Indonesia's PT Telekomunikasi Selular (Telkomsel) and Turkey's Avea.

"Operators are interested in the ability to zero rate anything by inviting brands in," says Boilesen. "In Russia, Unilever sponsored a week's free Internet access, and Yandex did the same in Turkey."

A major attraction of Opera's technology is that it allows operators to adapt prices for Internet services according to peaks and troughs in demand -- much as an airline might slash fees on empty flights but jack them up when seating space is running low. "It gives operators a huge amount of flexibility," says Boilesen.

Opera's compression capabilities also reduce the amount of data that Internet services consume, lowering costs for operators and their customers. Indeed, the company claims its compression techniques can boost the size of a customer's data bundle by as much as 50%.

That could certainly help win over the skeptics, but further information about the impact of Web Pass on data ARPU and the take-up of paid-for data services would be even more compelling.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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