DENT Wireless’ eSIM: What’s the optimal pricing strategy?
Is DENT Wireless’ current eSIM pricing strategy still effective? What are the negative effects caused by the one worldwide plan pricing strategy and how to overcome them?
Table of Contents
- 1 DentWireless’ current eSIM pricing strategy
- 2 Other Global eSIM providers’ common pricing strategies and principles
- 3 How network cost prices in different countries impact the price structure?
- 4 Pay as you go pricing model (explained)
- 5 Proposed new DENT Wireless Pay as you go pricing model
- 6 Optimal Product Mix
- 7 Micropayments DENT vs USD (or other fiat)
- 8 Ideal Combination
DentWireless’ current eSIM pricing strategy
At the moment, you can get a DENT eSIM worldwide plan that covers 80 countries with a duration of 365 days, and you can select out of 5 data plans:
- 1GB for $4.99
- 3GB for $12.99
- 5GB for $20.00
- 10GB for $39.99
- 20GB for 74.99
At first sight, this is a simple and easy to understand pricing strategy. But let’s have a look at the alternative pricing strategies…
Other Global eSIM providers’ common pricing strategies and principles
Although there are some other global eSIM providers (as GlobaleSIM, MTX Connect, Surfroam) who offer solely “global data plans”, most other providers use a range of data plans where they combine the 3 main components together into specific data plans with:
- a certain number of MB/GB.
- a certain country, region, or “global” coverage.
- a certain duration/validity in days (1 up to 365 days).
The used pricing structure is logical and based on these principles:
- Quantum-discount mechanism. The more MB/GB you’ll buy per transaction, the cheaper the unit price per MB. Plus, if a credits system is being used, the larger the credits bundle, the lower the relatively price per credit. Note: credits or prepaid plans can be dominated in USD or other currency value, data (MB)/voice (minutes), or DENT credits (i.e. future telco purchases or usages that are paid with these DENT credits)
- Duration mark-up. The longer the duration, the higher the price. This principle is based upon 2 aspects. The earlier quantum-discount mechanism. The more you’ll use/buy in a certain time period, the cheaper the unit price per MB. Plus the longer the duration, the chance that you’ll end up with unused data is lower (and unused data is an extra profit income for the providers).
- Coverage mark-up. The bigger the areal coverage, the higher the relatively price. This principle is based upon the “higher-service level”, but also due to the difference in cost price (see next item). Hence, a regional package is always more expensive than the highest-priced individual country in that specific region. And the worldwide package is more expensive than the highest-priced regional package. Plus, multiple carrier coverage is always more expensive than single carrier coverage.
- Different cost price structure in each country. Each MNO (network provider) in each different country has its own cost structure (due to different network infrastructure (2G, 3G, LTE, 4G, 5G), radiofrequency costs and licensing fees, population density, local competition, etc.) and as a result has a different sales pricing structure that they charge to MVNOs.
As a result, eSIM providers usually offer several plans per country/region with different sizes and durations.
Or to say it in other words…
Providers who solely offer global data plans with several different sizes and have a fixed standard duration (without choices) only use the quantum discount mechanism. Hence, they don’t take the last 3 principles into account, and base their pricing on average duration and usage in different countries.
In the next theoretical example, I’ll give an explanation why these solely “global data plan” providers have a disadvantage in comparison to their peers.
How network cost prices in different countries impact the price structure?
At the moment, there is a huge difference in average mobile data prices all around the world. The cheapest countries are India ($0.09 per 1GB), Israel ($0.11), and Kyrgyzstan ($0.21), while on the other spectrum some islands have prices of $28.00+ (for example Bermuda, Falkland Islands). To get more background info, and to see the pricing for 228 countries, check this excellent worldwide data research of Cable.co.uk (research data as per February 2020).
But instead of taking real actual sales prices, let’s have this…
Update: in this example 50 countries are used as this was the number of supported countries by DENT eSIM at the moment of writing. Just a few days after this post, the number of supported countries has been expanded to 75.
For this example, let’s assume that every MNO (local network operator) in each country has its own different cost structure and as a result has a different pricing structure (based upon a cost price mark-up price system).
Hence, they charge different MB/GB rates to individual MVNOs. But let’s assume that all MVNOs pay the same price per 1MB usage by their clients (hence without taking into account quantum and contractual partnership discounts, or other price determine differences).
Let’s further assume we have 50 (supported) countries with all different “cost price” rates. In this example, the cost price (for each MVNO) in country 1 is $0.10 per 1GB, in country 2 $0.20, in country 3 $0.30, all the way up to $5.00 per 1GB in country 50.
Also, let’s assume that the total users’ usage is the same in each country. In that case, the average cost price for each MVNO will be $2.55 per GB (but let’s take for simplification and easy calculation $2.50 as average).
Let’s look at DENT Wireless in this example, and assume that the average sales price is $4.99 per 1GB (the current price). Hence an average “mark-up” of (about) 100%.
I hope that you can see that, in this example, the profit margin for country 1 is outstanding with 49x the cost price ($5.00 minus $0.10 = $4.90 profit margin). While for country 50 there is no profit margin, but it is break-even (sales price equals cost price).
Now, let’s assume there is another MVNO who uses individual country plans and is “happy” with a 100% mark-up. In that case, the sales price for country 1 will be $0.20, for country 2: $0.40, country 3: $0.60… ,and for country 50 it will be $10.00.
For the mathematicians, see the table below…
Negative effect 1 (too high prices in half of the cases)
Hence, this MVNO is in 24 countries cheaper than DENT Wireless, in country 25 it is using the same sales price ($5.00), and in the other 25 countries (numbered 26-50), this MVNO is more expensive than DENT Wireless (DW). So, DW won’t attract potential clients in 24 countries.
Negative effect 2 (not taking advantage of unused data)
However, if this example MVNO uses a lower validity, for example, 30 days, you can expect that the amount of unused data is larger. Say, for this MVNO the unused data is 20% on average, while for DW the unused data is zero as users can sell unused data later as an extra feature.
So, now this example MVNO also has a 20% extra income from unused data, and can in theory lower it’s pricing with this percentage. But let’s assume that this example MVNO just keeps the extra income, and has as a result 150% mark-up (instead of 100%) as for each country the cost price will reduce with 20%. For example, in country 1 the cost price will reduce from $0.10 to $0.08 while the sales price keeps the same at $0.20 ($0.12 profit margin on top of the $0.08 cost price equals 150%).
So, what will be the effect, assuming that consumers only look at the average price they are paying per 1GB, and just need the coverage for 1 single country, and are happy with 30 days validity?
Well, most users will opt for the alternative MVNO in case they are traveling to countries 1-24.
But for the other 26 countries, DW is the better option. But as a net effect, the example MVNO makes a profit margin of 150% while DW makes on average 39% profit in these other 26 countries.
So, a pricing structure just based upon averages will lead to a competitive disadvantage. If potential customers act rational, half of the potential customers will go to other cheaper eSIM providers who can offer better prices in the (cost price related) cheaper countries. And the other half of the potential customers will purchase the global data plan, but with as result, a much lower profit margin than originally aimed.
And if DW doesn’t adapt and keeps just one average price ($4.99), in theory, the other MVNO can use higher prices for countries 1-19, say $4.00 and it will even make more profits (as $4.00 is still cheaper than $4.99).
Just to give you a real example… Truphone charges £1.50 (about $2.00) for 1GB in the UK with validity of 30 days (while DW charges $4.99 for 1GB with 365 days validity), and Truphone charges £3.00 (about $4.00) for 3GB with 30 days validity (while DW charges $12.99 for 1GB with 365 days validity).
Or to say it in other words…
Why will a user in a “low cost price country”, as for example the UK, pay for usages in a higher cost price country (as for example Switzerland) if this user won’t visit Switzerland?
Or why should a user “pay” for a validity of 365 days while he only needs a few days to visit London?
So, although DW can now compete in price with other global eSIM providers who offer a worldwide data plan, it can’t compete in many individual countries (the ones with the lower network costs).
Furthermore, the above negative effects also exist within individual countries. Although on a lower scale (as between countries), in each country, each carrier has its own pricing structure. And as we know that DW has Multi Carrier Support, an MVNO who just offers access to the “cheapest” carrier has an advantage above DW who gives its users access to “several” carriers (including the more expensive carriers).
And the current 50 countries have in common that these are the more developed countries with lower network costs, but if DW want to expand to 100+ countries, many of these countries have higher network charges than in the current 75…
How can DENT Wireless avoid this unwanted negative “average” pricing effect?
Of course, by also offering individual country or “cost price equally clustered” plans with lower durations than 365 days.
However, DW recently switched from the original 50 individual country plans to one “worldwide” plan (with long validity of 365 days).
Was this a good or bad move?
For the short term (as long as competitive prices are more or less at the same level), it’s easier to attract new potential customers, i.e. international (business) travelers with a simple broad coverage, and long validity data plan.
Also, the DENT in-app purchase process is much easier and faster as the user doesn’t have to select individual countries and filter all kinds of sizes and validities.
But for the long term, with more competition and no changes in DW’s pricing structure, I think DW has to adapt.
Luckily there is another solution…
Pay as you go pricing model (explained)
This is how it works…
A user just has to buy a “pay as you go plan”, aka “credit bundle”, for an amount of $X (for example for $10.00), and only after actual usage, the user will be charged for each MB data used (by using the credits in his bundle). The charge per MB is different for each country.
As extra benefit, besides data, users can often call or SMS in all covered countries (again by paying a tariff per voice minute or SMS).
As prices can be different in each country, the eSIM providers are charging based upon actual network charges per carrier. And they just use a mark-up on top of their network cost price per used MB.
But instead of having multiple products (data and voice plans) for each country with different data sizes and durations, there is just one product, the “pay as you go plan” (of course, the eSIM providers can choose which price bundles they use, for example, from $10.00 up to $100.00).
And the provider only has to publish the price table where a user can see what the tariffs are for each country and for each carrier. So, as benefit, a potential buyer doesn’t have to scroll down and filter through all possible data plans (with different coverage, size, validity).
But more important, some MNVOs (as eSIM.net) allow their users to select their preferred local carrier. Hence, by being carrier independent.
This can be interesting as usually the carrier with the best coverage (fastest connection and highest available bandwidth) is chosen (aka enhanced coverage) or just the one with whom the MVNO has a contractual relationship (single coverage).
But you can imagine that it can be interesting to choose for another local carrier (than the one your eSIM Provider has automatically chosen for you). For example, switch to a carrier with almost as good coverage but with cheaper tariffs (or the opposite switch to a carrier with the fastest speed but with high tariffs). Or switch from high platform (5G) to a lower less advance platform (as 3G/LTE/4G) to lower costs.
Currently, most global eSIM providers don’t explain into detail per country what platform is used, except for some general sentences as “fast LTE networks”. Or they don’t tell there users how many carriers are being used/supported, and what the policy is to use a specific carrier above another.
As you can understand, it can make a huge difference if the user is always automatically connected to just one (cheaper?) carrier or to the best available carrier (with the best coverage) that he can select himself or is automatically selected by the eSIM provider from a group of competing local carriers.
Note: as far as I know, DENT Wireless automatically uses the carrier with the best local coverage, and has “several” (i.e. at least 2) local carriers that are being used per supported country. Of course, this policy should be (better) communicated on DW’s website as it’s a competitive “feature” if you compare it with other global eSIM providers who use just one carrier per supported country (or use carriers with less “coverage”).
And of course, from the view of a user, the more carrier choices he has, the better. But as side effect, if a user forgets to switch back to a cheaper carrier, it’s possible that this user will pay more in the end than necessary.
Also, a pay as you go pricing model is interesting for users who don’t know upfront when, where, and how much data they will need. And they don’t have to “commit” to a certain coverage, size, and/or validity period.
That’s why eSIM providers in general charge a slightly higher unit price per MB than they are charging in the individual data plans.
Because a low quantity with long duration and broad coverage is priced higher than bigger quantities, short durations, and single country coverage (Remember the first 3 pricing principles).
(This higher PAYG eSIM pricing has also a historical cause… the prepaid SIM only plans… here the higher pricing was used to “earn back” the costs for the administration, creation and sending of the physical SIM card)
But this “explanation” for higher pricing per MB is not always the “reality”.
Yes, it’s true for incidental users…
But what about heavy users who travel a lot, but don’t know upfront to which countries (as many international sales managers)? Or heavy users who have no steady usage but extreme “peak” moments while on location? Or just any (regular) user who just prefers to have no commitments?
Well, by charging relatively high tariffs in the “pay as you go model”, you force people to use the regular data plans.
But what will happen if an eSIM provider will charge very competitive pay as you go tariffs?
I mean just a “little” mark-up on the actual carrier “cost price” per MB usage.
This way, a user knows upfront that he will pay a “fair price” and he will never pay too much for unused data. And all he needs to do is regularly recharging his pay as you go plan without any searching for the best and cheapest data plan.
And DENT Wireless is perfectly positioned to ensure that DENT App users will even get a better deal by taking advantage of several DENT App features and the DENT token.
So, let’s introduce…
Proposed new DENT Wireless Pay as you go pricing model
The pay as you go model can have several forms:
- Prepaid “data credits bundle” or prepaid “currency value credits bundle” and being charged from the bundle at actual usage.
- Deposit a collateral (fiat or token) and being charged at actual usage.
- Postpaid. No upfront payment or collaterals, but being charged postpaid for actual usage (while having proper KYC and assigned “lending contract”).
As far as I know, all global eSIM providers use the first model and let user pay an amount upfront as “credit bundle”.
While model 3 is often used by many local providers who have a contract with their client. You know those monthly subscription plans (for voice, SMS, data, device lease/purchase), and where actual usage beyond the bundle is charged every month (postpaid plans).
But as DENT Wireless has the DENT token, model 2 can also be very interesting…
So, instead of paying a dollar amount upfront (for a credit bundle), DENT Wireless can ask for a minimum DENT deposit, and charge actual data/voice usages with (micro) DENT payments. (An option is to use the Afterburner Vault for this deposit).
And yes, there are some users who prefer to pay with fiat, while others have no problems with buying DENT upfront. But DENT Wireless can make it more attractive to use DENT instead of fiat…
Especially, if users get relatively more DENT credits, the higher the DENT (dollar) bundle amount. Read this report for examples.
Or if DENT Wireless gives a certain discount to users who pay with DENT instead of fiat (think about a discount somewhere between 5-10%).
Or if DENT Wireless introduces a DENTback program. This is my definition of a cashback program in DENTs. The more you use, the more DENTs you’ll get as cashback. A clever way to stimulate the DENT usage and reward heavy users (to “offset” the earlier “wrong” conclusion that only “incidental” users have interests in a pay as you go model).
Or introduce a simple auto-renewal purchase option where a DENT App user automatically buys a DENT Bundle (for $9.99, $19.99, $49.99, $99.99) if a certain minimum threshold of DENT is reached (for example 5,000 or 10.000 DENT).
And of course, I like to see extra benefits in the DENT Afterburner Loyalty Program. Think about discount percentages, the more deposited in the AB Vault, the higher the discounts as charged by pay as you go (or the user will get extra DENTback).
But of course, DENT App users can also earn free DENTs via the:
- Referral program
- Earn Tab (improved Offer Wall)
The PAYG model also allows to combine data and voice, but other telco products and services can easily be added (and charged via pay as you go). Think about SMS, toll-free number, extra telephone number, etc.
And as a result, there is no unused data anymore. So no need to set up a marketplace for unused data.
But what about pooling/allocation/sharing of mobile data?
As you know, the pooling is now done via DENT TEAMS, and based upon sharing of already bought data plans. With pay as you go with DENT payments, the main “team” administrator just has to allow that other users can use his DENT deposit (to a certain amount). It will take some development to introduce this feature, but as far as I can see, it won’t be that more difficult than the current aimed TEAM allocation and sharing features based upon data plans.
But what if a DENT App user can freely transfer DENTs to any other DENT App user?
This way, the sharing is just a matter of sending some DENTs to another user.
Think about it. You are a father with 3 lovely kids, and they use mobile data all the time, but you as dad want to “control” the data consumption.
What’s easier than just sending some DENT periodically?
Yes, for some kids that would be daily, while for others this can be done once a month, but the DENTs can only be used for mobile services. So, sending some DENTs is often a much better option than buying a credit bundle for say $10.00 that your kids can “consume” with gaming in a few hours.
The pay as you go model with DENT payments is also perfect for IoT/M2M devices. No contracts, just a DENT deposit.
So, I think that if DENT Wireless will introduce the “fair” pay as you go pricing model, that it will really disrupt the mobile data market.
Think about it…
In the end, DENT Wireless as MVNO, is just a “middleman” who has “contracts” with local carriers that the DENT App users may use the local carrier’s network for mobile data and voice usage at preset prices (charged by the local carrier to DW based upon actual usage) and where DENT Wireless makes a profit margin by offering this service to its users.
So, why not just use the mark-up system with the pay as you go model with carrier independency. It’s the most fair pricing model. Especially, if you reward heavy users via all proposed DENT token and DENT App elements as described above.
If we agree that the pay as you go model should be introduced at least as one of the available options, what would be the…
Optimal Product Mix
So, in theory, DW can offer different eSIM data plans and can make distinctions in:
- Geographical Coverage.
- Single or Multi Carrier Support.
- Cost price based bundling (of carriers or countries).
- Fixed data size plans or pay as you go model.
- Payment methods: prepaid data bundles, prepaid USD credit bundles, prepaid DENT credit bundles, DENT deposits.
- Validity (duration).
For example (not limitative):
- One worldwide data plan covering all countries and as much supported carriers (Multi Carrier Support), the current model.
- Several regional plans (a regional division of the worldwide plan) with as much supported carriers in the region (Multi Carrier Support) .
- Several bundled country plans based upon the “cost price” structure (with Multiple Carrier Support).
- Individual country plans with Multiple Carrier Support.
- Individual carrier plans (Single Carrier Support).
- Worldwide pay as you go model.
As you can see there are many product combo options as DW can combine the different elements like geographical coverage, size, duration, payment method, and single or multiple carrier support “anyway they want”.
Plus DW can add all kinds of extras as DENT benefits, Afterburner benefits (discounts or free usage), and options to earn free DENT or data via the Earn Tab.
And DW have to decide about “quantum discounts”.
So, what is the ideal product mix?
Let’s look at the perspective of the different “players”: the users, DW, and the local carriers.
Let’s first look at the user’s perspective…
A user wants to have access to mobile data wherever he is. But the options are dictated by the local coverage he can get from all the available (i.e. supported) local carrier(s).
Ideally, a user can select his preferred carrier based upon wanted and available quality vs the different cost price that each (supported) local carrier can offer that moment for the specific location where the user is.
And ideally, the user shouldn’t have to switch from carrier “all-the-time”, but he should get access to his preferred carrier based upon his settings (like “always the best and fastest connection”, for his home country “preferred carrier order 1, 2, 3”, “only use 4G/LTE (no 5G)”, “maximum price per GB”).
And most of the time, a user already has a primary data provider as he has a monthly prepaid or postpaid plan with one of the local carriers.
If this is the case, the DENT eSIM data plans will only be used in case of “bad or no connection”, “out of bundle usage”, or while “traveling abroad”.
Hence, to summarize maximal flexibility with respect to carrier selection and moment of usage with automation in accordance to preset preferences.
And of course, for the lowest price as possible.
And by no means, a user wants to pay a mark-up for “unnecessary” geographical coverage. I mean, why should a user pay for possible usage in Switzerland, if he only stays in the UK?
As you now (hopefully) understand the areal coverage mark-up rule, it’s not in the benefit of users if they can only select products with “too broad” coverage.
If we look at the perspective of DW…
DW on the other hand, wants to sell as much mobile data as possible while making the aimed profit. In essence, it should not matter what the location is of the user as DW can’t influence this. So, DW should strive to a “worldwide” coverage.
And the more data a user uses in a specific time period, the better. Hence, DW wants to reward “heavy” users with quantum discounts.
If we look at the perspective of the local carriers…
For the local carrier, all that matters, is that they get paid for DW’s “guest” user for actual usages, and that they can acquire as much guest users as possible (not losing them to competitors).
With respect to pricing, let’s assume that the local carrier uses some form of quantum discount. Hence, the more data an MVNO uses (on behalf of its users), the cheaper the unit price (price per GB).
Now taking all these different perspectives into account, and if we look again at the main 3 price structure rules (Quantum-discount mechanism, Duration mark-up, Coverage mark-up), you’ll see that in reality only the Quantum-discount rule places a role with respect to the actual cost prices that DW is paying to the individual local carriers.
Of course, the Duration mark-up is also used to force people to use more data in a certain time period, and is also a way to lower the cost price for the MNVO as unused data can be seen as an additional profit. But in essence, DW doesn’t pay more to the local supplier if a user has more time to actually use the data.
And the current way of how the Coverage mark-up is being used, is just to avoid that people will buy a data plan with a broader coverage and use it for a specific country at too low costs (if the broader plans is priced below an individual country plan).
So, to disrupt the market, DW can “skip” the duration mark-up (that’s what they are already doing with the long 1-year validity) and can “skip” the coverage mark-up by offering individual country plans and/or individual local carrier plans.
And yes, the easiest way to do is by offering a pay as you go model where a user can select as many local carriers as possible. All with its own pricing and where DW just uses a mark-up on the cost price.
But the main question is…
Should DW also offer worldwide/regional/country or even local carrier data plans with fixed GB sizes besides the pay as you go pricing model?
The answer is simple…
Only if a user can pay less in comparison to what he pays as the PAYG price. Hence, that he get rewarded with a relatively lower price per unit (i.e. GB) if he buys higher amounts of data at once (yes, the quantum discount) or within a certain time period (yes, the inverse duration mark-up rule).
But this can mean an “endless” number of products. In theory for each carrier, DW has to offer different sized data bundles (with quantum discounts) and with different durations.
And we know that DW wants to disrupt the market, and is no “defender” of short durations.
Of course, DW can opt for individual country plans instead of individual local carrier plans. Especially, if the prices don’t differ that much, i.e. that all carriers in a specific country more or less use the same prices.
However, by offering broader regional and/or worldwide plans, DW will have the same negative disadvantages as described above. So, these broader plans aren’t a real solution.
Or should DW only use the pay as you go model and don’t use fixed sized data plans?
Instead of offering an endless number of products, it’s easier if DW only uses the PAYG model and uses other methods to reward “heavy” users.
By using the DENT token in 2 ways:
- Extra DENT credits. The higher dollar amount spend to buy a DENT bundle, the more extra credits the buyer gets (see below for example).
- Reward heavy users with (future) discount by giving DENTbacks, a cashback in the form of DENT. The more data a user spends per month, the more DENTs the user will get for free. This can even be stimulated by giving additional discounts for users with AB Vault balances.
Probably, there are more ways to reward heavy users. But this article is meant to give a direction and options for the management to choose from.
Of course, DW can also use the PAYG model with a small number of fixed sized data plans. But to really compete with local carriers and MVNOs, DW should either use the PAYG model, or offer a range of data plans for each individual local carrier (single carrier support) or each individual country (multiple carrier support).
Micropayments DENT vs USD (or other fiat)
As (required) payment vehicle, the DENT token has some disadvantages for users:
- The DENT token price fluctuates, while the USD or other official currencies are “stable”.
- The DENT token is not a common widely used payment method for buying other goods and services as regular currencies. It is only used inside the DENT ecosystem.
- DENT tokens deposited into the DENT Apps or purchased inside the DENT Apps are treated as DENT Credits, and can’t be withdraw to external wallets and can only be used for (in-app) telco purchases.
That said, payments with DENT (the DENT token and DENT Credits) has also some benefits:
- DENT is perfect for micropayments inside the DENT ecosystem with neglectable transaction costs while micro payments via PayPal or credit card are expensive. For example, a $1.00 payment from a user who pays with PayPal costs DW about $0.33 transaction fee.
- DENT can be used inside the DENT ecosystem and no other connections with other systems have to be made (external connection with PayPal or Credit Card). Hence, payments with DENT are faster and easier.
Of course, in the end, DENT Wireless wants to get paid without being charged too high transactions costs by external parties as PayPal or credit card companies.
So, DW prefers larger payments from customers instead of micropayments (of $5.00 or lower). As the higher the amount, the relatively lower the transaction fees are as percentage of the total achieved USD amount.
Let’s assume that the minimum dollar amount DW wants to receive from a paying customer is $5.00 (to avoid relatively high transaction fees).
(Note: the lowest data plan of 1GB costs $4.99)
But what if data prices will decrease (as is the general market forecast), or if DW wants to introduce 1GB plans for the “cheaper” countries (and/or carriers), for example, 1GB for $1.00?
Well, there are 2 options…
DW can only offer products with a minimum sales price of $5.00. For example, offer a 5GB plan for $5.00.
But I prefer this next option…
DENT App users are only allowed to pay for “micropayments” with DENT credits and not with fiat (Micropayments are payments under $5.00).
And of course, just as it is possible now, DENT App users can buy these DENT credits inside the app via the DENT dollar bundles.
However, with this 2 new mechanisms…
- Extra DENT credits
The higher the dollar bundle, the relatively more DENT credits a user gets.
For example, assume that the DENT/USD price is $0.0002 on the exchanges. For $5.00, a user will get 25,000 DENT credits…
But if he buys for $10.00, he will get 52,000 (4% extra), and if he buys for $20.00, he will get 106,000 (6% extra), and if he buys for $50.00, he will get 270,000 (8% extra), and if he buys for $100,00, he will get 550,000 (10% extra).
These extra amounts will kind of offset the risks for the users of holding DENT and price decreases.
If you think about it…
The more a user spends upfront, he commits to use it for future purchases (quantum discount mechanism), while DW is saving transaction costs.
Just to compare… (PayPal charges $0.30 + 2.9% merchant fees)
A user who purchases 20 times a 1GB data plan for $5.00 and pays with PayPal, for this user DW has to pay PayPal total merchant fees of about $8.90 (20x$0.445), while a $100.00 purchase at once, costs DW $3.20.
(Note: yes, I know there is this PayPal Micropayment fee: 5% of the transaction, but this can only be used by DW if it receives only micropayments. And yes, DW can apply for merchant rates of volume is higher than $3K per month, to decrease the rate from 2.9% to 1.9%, but you get the idea that merchant charges for micropayments via PayPal are relatively high, and that DENT credits are the perfect solution for micropayments as the transactions costs are neglectable).
2. Use the war chest for the DENT credit bundles
Currently, if a user buys a DENT credits bundle (with dollars), the necessary DENTs are being bought by DW on DENT Exchange (via the DENT/BTC pair).
But as long as there are DENTs in the main company wallet, the war chest, why not use these DENTs?
Instead of releasing hundreds of millions of DENTs at once, sell these DENTs on exchanges for BTC (sometimes via additional pairs as DENT/ETH and thereafter ETH/BTC or DENT/USDT and thereafter BTC/USDT), and use the BTC to buy DENT again on DENT Exchange, it’s so much easier and much cheaper (as it avoids trading (bid-ask spread), transaction, and withdrawal costs) to just use the “company DENTs” to deliver to DENT App users who want to buy a DENT credits bundle.
So, the ideal combination…
No matter were a user is, after clicking on the DENT eSIM tab, he selects the country he is in (or even better the system automatically selects this for him), and now he gets several options:
- PAYG option: the user can select his favorite carrier and platform where he can see the tariffs for each carrier (USD and DENT tariffs per MB or voice minute), but he always pays with DENT, or
- he can select out of several data plans that cover his area (carrier, country, regional/country, worldwide), where he can choose to pay the plan with DENT or fiat.
The pricing is based upon a markup system (on top of actual local carrier cost price charges).
The cheaper data plans (below $5.00) can only be paid with DENT, and the higher priced data plans can also be paid with USD/Fiat.
The customers’ PAYG charges are always paid with DENT, and there is a minimum DENT threshold (for example of 5,000 DENT (about $1.00).
If this threshold is achieved by actual usage, the DENT app user has to buy a new DENT credits bundle, where the higher the dollar amount spent, the more extra DENT credits the user will get (as in the example above).
Besides extra DENT credits, the more dollars are spend, there is a DENTback program for all telco purchases by DENT App users.