Why mobile communications will help drive prepaid electricity services

Electricity prepayment service was a feature of markets such as the UK long before commercial mobile networks started to be rolled out. Nowadays, mobile communications are deeply ingrained in our daily lives, and advances in mobile broadband technologies are constantly extending the possibilities for wirelessly enabled services and interaction. By piggy-backing on this evolution in mobile communications utilities can enhance how they deliver energy prepayment services and help drive their wider adoption.

(1) Mobile is (almost) everywhere

Today, there are nearly as many mobile phone subscriptions as there are people on the planet – close to 7 billion, according to the ITU. Vast areas of the inhabited world are now cloaked in a mantle of 2G mobile voice coverage (at a minimum), and mobile phone ownership continues to rise, especially in emerging markets.

In the span of a generation, mobile communications have become near-pervasive. If not yet entirely ubiquitous, basic mobile coverage supporting voice and SMS text messaging services nevertheless reaches well beyond our crowded towns and cities into more sparsely populated rural areas, offering near-complete population coverage in many countries.

There is also a steadily growing footprint of the more advanced mobile broadband network technologies such as HSPA and LTE. Mobile broadband coverage will only get better, including in developing countries where mobile technologies are essential for extending broadband connectivity to areas where building fixed-line infrastructure would be impractical and uneconomical.

The global presence of mobile network infrastructure and a mass penetration of end-user devices benefit society in many ways, including boosting economic development. For electricity utilities, there is a golden opportunity to exploit this communications infrastructure to spur the development of electricity prepayment services.

(2) Mobile has popularised prepayment

In many countries, prepayment for energy services is a new concept or a relatively recent phenomenon. But prepayment has been very popular among mobile phone users for many years and even predominates in some markets. There are various reasons why mobile users choose to prepay, with convenience and managing costs common among the motives.

This widespread familiarity with prepaying for mobile services can help pave the way for utilities to introduce the pay-as-you-go concept for energy supply services. Indeed, suppliers that are launching energy prepayment services for the first time typically make parallels with prepaid mobile usage to explain how the service works.

The benefits are not just limited to educating users about the mechanics of prepaid energy service. People who have enjoyed a positive experience of pay-as-you-go mobile could well be more receptive to the idea of prepaying for their energy too.

While energy customers will still need support in the transition to prepaid service, thanks to people’s familiarity with prepaid mobile, electricity suppliers can get off to a flying start.

(3) Mobile facilitates energy prepay top-ups

A good electricity prepayment service should offer convenient ways to top up. Not being able to get to a pay-point during opening hours or long waits to buy a voucher can cause deep dissatisfaction, as well as being a barrier to switching to pay-as-you-go service (assuming there is a choice).

For a customer living in a remote African village, it might take a whole day to go to the nearest outlet and buy a voucher for electricity. If instead they could top up from a mobile phone, then clearly this would be much more convenient. In fact, mobile payment platforms such as M-Pesa are already proving popular for recharging prepaid electricity accounts in Africa – Kenya Power says 70% of its prepaid customers now top up this way.

M-payment technologies like M-Pesa have opened up a whole new range of financial transaction services for mobile phone users, whether they have bank accounts or not. Utilities can take advantage of these new technologies and rising mobile phone penetration levels to offer more convenient energy top-ups and improve customer satisfaction with electricity prepayment services.

(4) Mobile is fab for consumer engagement

Mobile phones are personal devices, which of course makes them a very effective channel for getting messages through to the right person – in the case of energy, those responsible for running the home.

At a basic level, energy suppliers can send their pay-as-you-go customers mobile text messages to advise them when their credit is running low and they need to top up. Such alerts could be supplemented with other, richer information, such as how long the remaining credit might last based on the customer’s historical usage behaviour. Other basic messaging could include notifications when the user’s balance reaches zero and confirmations that top-up payments have been credited to the account.

mobilemessagingforprepaidenergytopups

Managing energy top-ups from mobile devices

2G mobile networks – which are extensively deployed, even in rural areas and in emerging markets – are all that are needed for consumer interactions based on text messaging. Where there are more advanced 3G or 4G data networks, coupled with a widely diffused use of smartphones and tablets, then energy companies would have an opportunity for more sophisticated types of interaction with their customers, based around using mobile phone apps. As well as enabling top-ups, these could display energy usage in graphical format, provide usage histories and forecasts, and introduce special offers and other promotions.

While there are other important platforms for customer communication, including online portals, call centres, and in-home displays, because mobile devices are never far from their owners’ hands they offer an unrivalled immediacy and stickiness as a communication channel.

Both in developing and developed economies, there are huge opportunities to use mobile communications to help drive the uptake of pay-as-you-go energy services. Of course, there will be a cost to utilities when it comes to leveraging mobile communication networks to make their energy prepayment programmes more convenient and more engaging for customers. But embracing the use of mobile makes for a vastly improved customer experience, and could help spur a much more widespread adoption of pay-as-you-go as a payment mechanism for electricity service.