The future of Selling and Trading of (Unused) Mobile Data
As part of the disruption and mobile data liberalization, DENT Wireless wants to create a global marketplace (using blockchain technology), where everyone on this planet has the opportunity to buy and sell mobile data (and voice packages).
This market consists of 2 components. The primary market where new data packages and plans are offered, and the secondary market where (after installation, activation, and partly usage) remaining unused data is being traded.
Also, this market can be divided into traditional SIM related products (as mobile data packages and prepaid top-ups) and eSIM data plans.
So, in total, there are 4 market segments.
|A. Primary SIM Market||C. Secondary SIM Market|
|B. Primary eSIM Market||D. Secondary eSIM Market|
Of course, we look at all 4 market segments, but this article is especially about segment D. the selling or trading of unused eSIM data.
With the DENT Apps, Marketplace and DENT Exchange, DENT Wireless has the necessary ecosystem in place to enter this market. But under what conditions, and how can this be done with the best results?
As it’s not that simple, I’ll look at several (complicated) factors to take into account and that probably will determine whether the selling of unused eSIM will be a success or won’t?
Table of Contents
A. Primary mobile “SIM” data market
At the moment, DENT Wireless has solutions for the primary market with the DENT Marketplace and DENT Exchange where users can buy and sell (new to be activated) mobile data and prepaid top-ups for 227 different (local) carriers. These are all physical SIM related products.
DENT Wireless buys these packages often from middlemen, and sometimes directly from the local carrier.
But here is the thing…
As soon as a device holder has chosen for a pre- or postpaid plan offered by a carrier, he’ll get a SIM card that can only be topped up with a package offered by that same carrier. (Note that this carrier also issues the mobile telephone number)
And if a user wants to switch from telco provider, he needs a new SIM card suitable for the other network. Of course, issuing a SIM card comes at a cost, and the new telco provider either charges directly for this SIM card, or covers the costs indirectly via the post- or prepaid plans.
Hence, it’s often “annoying” and costly to switch from telco provider.
Or to say it in other words…
If you are a “SIM” client of a certain carrier, you’ll probably stay a client for a long time.
You all probably know this, but why is it important?
Well, DENT Wireless had the idea that by acquiring enough new DENT App users who are using a certain carrier, the team could take advantage of the “united buying power of these users” and can negotiate for “quantum discounts”.
But as explained above, these DENT App users are already “clients” of the carrier. Hence, there is no need for carriers to give DENT App users an extra discount (and walking away to another carrier comes with a “cost’).
This is in my opinion the main reason that DENT Wireless can’t get enough “discounted” packages. The carriers just don’t offer (significant) discounts.
(Note: some carriers do have resellers (or wholesalers) but these resellers usually offer the packages at the same prices as the carriers are charging)
Also, as you can read in our article about DENT Wireless Marketing, the prices of the tradeable packages on DENT Exchange are often highly inflated due to the incentives system where DENT App users can get free DENTs via referrals or Earn Tab rewards.
Another reason for the inflated prices is the fact that the team didn’t manage to get enough telco providers on board (who either want to sell their top-ups at a discount or join the telco trading desk).
To summarize, DENT Wireless did an excellent job and acquired 25 million DENT App users, but the system is losing its effectiveness due to the inflated prices and lack of supply of discounted packages, which of course, don’t stimulate users to come back and purchase these packages.
B. Primary mobile “eSIM” data market
As we all know, DENT Wireless now offers its own eSIM data plans.
As the eSIM technology is growing in importance and will be the future standard for mobile data, it’s logical that the main management focus is shifted from the traditional (local) SIM related products, to (worldwide) eSIM data plans.
With eSIM enabled devices (smartphones, laptops/tables, wearables, IoT devices), you can install multiple eSIM profiles and top up data plans offered by multiple suppliers (without the need to replace the “plastic” SIM cards).
Hence, eSIM users can buy mobile data plans from any provider they want and install, activate, and use the plan in minutes. Or switch between plans any moment they want wherever they are. For example, abroad to avoid higher roaming costs, locally for better coverage, or after running out of data in excess of the monthly subscription plan.
Of course, as it’s easy to switch from provider, the eSIM market will be a very competitive market where providers will fight for their clients.
So, how can providers compete with each other, other than on price?
Well, let’s first answer the question: what is an eSIM data plan?
Simply stated, an eSIM data plan allows the user to send/receive mobile data with these characteristics:
- The size. The maximum amount of MB or GB that can be used in…
- A specific time period (the duration)… for
- A specific covered area (country, region, worldwide plans) with a…
- Specific guaranteed quality of bandwidth speed or used technology (LTE, 3G, 4G, 5G)… and
- “Delivered” by a specific Mobile Network Operator (MNO), the network operator… and
- A telco provider (MNO or MVNO) where the user buys the data plan from. This can be the MNO who actually “delivers” the network service, or another M(V)NO who “lends” or “uses” this network (and of course pays for this service).
Read this article about the differences between MNOs and MVNOs.
For now, the most important thing to understand is that at any location, there can be many MVNOs who offer eSIM data plans for that area, but there is only one actual MNO who “delivers” the main service of sending and receiving of mobile data via the underlying network.
Hence, all M(V)NOs, who act as telco provider, have to purchase “this service” from the network operator when their clients are using this network.
Also, it’s important to understand that the local charges by these network operators do differ all around the world as circumstances and costs of the network are different.
Think about the status and quality of the network, area density, 3G/4G/5G license costs or subsidies, competition, and other factors that effect the investments and costs of the network.
Of course, there are worldwide multiple and different (price) agreements between the network operators and the telco providers. And the more usage, the lower the prices in MB/GB (quantum discount). But overall, this “rental charge” is more or less the same for the larger M(V)NOs.
So, how and where can telco providers compete with each other?
In analogy with the eSIM characteristics… by offering different priced data plans with different size, duration, covered area, and/or guaranteed quality.
Where these standard “price/quality rules” apply as:
- The higher the number of MB/GB someone buys, the lower the price per MB/GB. (Quantum-discount mechanism).
- The larger the areal coverage, the higher the price. 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.
- The longer the duration, the higher the relative unit price (in MB/GB).
- The better the quality, the higher the price.
- Contracts, monthly subscriptions, fixed renewals, and combo products (of bundled data, voice, SMS, device purchase, broadband internet connection, etc.) have by definition better conditions than stand-alone top-up data plans, or pay as you go prices. (Of course, at the costs for users that they often won’t use all the data each month while paid for).
However, there are some other unique features that telco providers can add to make their data plans more competitive and interesting for users.
- Allow sharing of mobile data among other users and devices.
- Specific features around “unused data/voice” as rolling forward to next month, discount on next monthly payment, or option to sell unused data.
Besides being competitive with worldwide coverage, long duration (standard 365 days), high quality, local breakout (to save bandwidth and costs), DENT Wireless also wants to disrupt the market with unique sharing features (as DENT Teams, shareable coupons, integrations with major messenger apps), and feature to give DENT App users the option to sell unused data.
But be in mind that the main price component is the local usage rate that the local network operator is charging to the “lending” telco provider. And that this rate is different all around the world.
So, in the long-term, if DENT Wireless keeps on offering just a few worldwide data plans with 365 days validity, it’s almost impossible to compete on price with other eSIM providers who offer individual country plans (in the cheaper countries) with a short duration.
Hence, sooner or later DENT Wireless has to follow at least with individual country and regional plans, and/or with shorter validities.
Before analyzing the secondary data market of selling and trading of unused data, let’s first answer some questions…
What is unused data?
Well, of course the data that’s left of your original data plan or package but that is still valid. Hence, where the duration (aka validity) period has not been ended. So, it exists of a number of MB/GB with a remaining duration period (for a specific covered area with given quality).
What’s necessary to sell unused data?
Of course, the telco provider should allow the selling of unused data to their clients. And there should be…
A marketplace or exchange where users can offer their unused data to other users or traders who want to buy this data (and can use the data themselves).
Or an in-app mechanism where users can sell their unused data back to the telco provider (or get a discount on their next purchase).
C. Secondary market: selling and trading unused SIM data
At the moment, DENT Wireless has not introduced the selling of unused “SIM” data except for a small pilot project with PLDT for DENT App users in the Philippines.
To my knowledge, this project technically succeed. Hence, DENT Wireless is ready to enter this market.
However, unfortunately no other telco provider has yet announced that they will allow unused SIM data selling in the DENT ecosystem.
So, let’s assume that it will be difficult to convince other telco providers to allow their users to sell unused data (via the DENT Marketplace) without first seeing that it can work and benefits the telco provider.
Until then, DENT Wireless has to start by doing it all by themselves with their own eSIM data plans…
D. Secondary market: selling and trading unused eSIM data
Of course, this secondary market exist out of 2 submarkets. DENT’s own eSIM unused data trading, and trading of unused eSIM data offered by other providers/suppliers.
Let’s start with DENT eSIM…
As we don’t know if the team has plans for a subscription (or auto-renewal) service, and/or will change the coverage and pricing strategy, let’s assume that the team will just continue with the current worldwide eSIM data plans (of 1GB, 3GB, and 10GB) at the current prices ($4.99, $12.99, $39.99) with 365 days validity.
So, what’s the best way to offer the feature of selling of unused data to the DENT App users who bought a worldwide plan with 365 days validity?
Some related questions
Well, first we need sellers who have leftover data. With 365 validity, worldwide coverage, and the easy sharing features, it’s the question how many users will actually end up with leftover data?
The user (who only has access to the DENT App and not to DENT Exchange) has to spend them inside the DENT App for…
buying mobile data (duh, he just sold mobile data), buying voice minutes, or deposit DENT inside the Afterburner (to get additional telco benefits).
So, for most DENT App users really not that challenging as most of the users who want to sell unused data prefer cash.
Only, in case the validity period end comes in sight, to avoid losing data, a DENT App user will sell his remaining data, and is glad to receive DENTs back such that he can spend them to buy a new data plan with the new 365 days validity.
Hence, before starting with allowing DENT users to sell unused data, the management team should think about ways to make DENT credits inside the DENT Apps more appealing, or allow users to withdraw them or transfer into cash.
As the coverage is worldwide, the remaining price determents are remaining validity and size.
Let’s assume that there are no restrictions and that DENT App users can sell the full leftover amount of data. Hence, the “sales unit” will be 1MB.
Such that users can offer X MB with duration Y for Z DENT.
How will the marketplace look like? As there are 2 main components: size and validity with endless possible combinations.
At the moment, traders can only buy uniform standard data plans (or data or prepaid top-up packages) with a fixed number of MB/GB or fiat nominal value.
By allowing different quantities of MB/GB and different durations for the selling of unused data, the number of unique products (X MB/GB with Y duration) will increase insignificantly (as X and Y can be “anything”).
The easiest way to solve this (and make the price quotes easier to understand and use for both buyers and sellers) is to “skip” the duration and convert unused data into new data plans with (again) 365 days validity.
But this comes at a “cost” for DENT Wireless as users will buy larger data plans with relatively lower unit price (in MB/GB due to quantum discount rule), as they know upfront that they can always sell the leftover data.
(For example, as users buys the 10GB data plan with a unit price of $3.99 per GB, and only need 1GB that costs normally $4.99. So, if you allow him to sell the 9GB at a price of at least $3.99 per GB, this user will only pay $3.99 in total for his 1GB)
On the other hand, if every DENT App user buys the 10GB data plan and tries to sell the remaining leftover data if the 365 days period comes to an end, maybe there are not sufficient buyers who will buy the leftover data.
Another point to consider…
What’s the main purpose of allowing DENT App users to sell their remaining data?
For me, it’s to ensure that users won’t pay for data that they don’t use.
But to achieve that goal, is it really necessary to have a Marketplace for a standard product eSIM data offered by DENT Wireless?
Maybe, it’s just sufficient that DENT Wireless will buy leftover data back from the DENT user in case the user doesn’t need the data anymore?
Of course, to avoid users who try to take advantage of the quantum discount rule, DENT Wireless won’t pay the full original price back but let’s say they pay 80% of the original price.
By using this solution, no marketplace is needed. Just “a simple” in-app buy back feature is sufficient.
This brings me to the objective of the Marketplace…
Originally, DENT Wireless wants to create a global marketplace (using blockchain technology), where everyone on this planet has the opportunity to buy and sell mobile data.
But what was the underlying assumption of striving for a global marketplace?
That users have no choice and often are left with unused data (in their monthly subscriptions or data top-ups). This “spoiling” should be avoided, and people should only pay for usage of the actual “guest” network at local rates (DENT Wireless tries to achieve this with data sharing, local breakout, and avoiding international roaming fees by using eSIM and the internet).
So, the marketplace was meant for international users. For example, a user from the USA who goes on holiday to Australia and wants to “transfer” his “local USA data” via the DENT Marketplace into “Australia data” for the time he is visiting Australia.
However, there is a reason why carriers use validity periods…
By offering different priced combo products of a certain maximum amount of data that can be used in a certain period, they can divide their clients in groups of users with on average the same usage and end up on average with a certain amount of unused data.
For example, a carrier want to offer a monthly subscription plan with 5 GB data. As the expected client group is large enough, now the carrier can set a price where the carrier has calculated upfront how much the average leftover data will be. Say for example 15% is unused. Hence, 4.4GB will be used on average and 0.6GB will be leftover. Assuming the carrier wants a certain profit mark-up, the carrier will calculate the monthly “sales” price based upon the actual usage of 4.4GB and not on the 5GB.
This same principle exists for data top-ups.
So, maybe, it’s unfair to say that users pay too much and lose money as they don’t use all the available data.
And maybe this “assumed” unused market potential for DENT Wireless doesn’t exist at all. Because if all users will sell the leftover data, the carriers have to increase their prices. (As a net effect, the user pays the same for his actual usage but now has to sell his unused data)
The best way to see what I mean is to look at the monthly subscription plans with “unlimited” data. Of course, unlimited data doesn’t exist, and all carriers use a “fair usage” policy, and again the monthly price will be based upon the average monthly usage of the whole group of clients with the same plan. If this group will use more data, probably the carrier has to increase the related price (all other things being equal, and assuming the carrier can optimize its network with otherwise new clients).
So, after 3 years of DENT Wireless’ operation, we can now conclude that this “ideal” marketplace, where users from everywhere in the world can trade mobile data, won’t happen as the traditional MNOs who offer local SIM solutions won’t cooperate.
But with eSIM, any user can easily and quickly install multiple eSIM profiles and data plans that can be used anywhere.
So, no more need for an international primary marketplace at all, or a secondary marketplace where users “trade” unused primary plans.
The only market left, is the secondary market of unused data. But here again, telco providers have to allow their users to sell unused data, and allow them to trade these data on DENT Exchange or the DENT Marketplace.
So, this is not under the control of DENT Wireless. The team only controls whether or not they will develop and launch the marketplace and offers it to their own users. They can try to get other telco providers on board, but will they succeed?
I have my doubts. Maybe it’s time to focus on optimal user experience and allow your own users to sell their unused data against preset conditions (without the need of a marketplace) as an extra service and USP.
So, my advice… skip the whole marketplace idea.
I mean (as explained in my article about DENT Wireless Marketing) the current marketplace for SIM related products has “failed” with inflated prices, and inactive non-returning users (except some traders and heavy influencers who exploit the system).
Why would the marketplace for selling unused eSIM data be a success?
Again traders will try to make and income, that can result in higher prices, but they can’t set the prices as they want. The price structure will more or less be dominated by the main primary price settings as set by DENT Wireless.
To explain this. With the current prices of $4.99 for 1GB, $12.99 for 3GB, and $39.99 for 10GB, you can expect the prices on the marketplace to be like this:
- Up to 1GB: $4.99 or little higher.
- Between 1GB – 3GB: $4.33 up to $4.99.
- Between 3B – 10GB: $3.99 up to $4.33.
And of course, if duration is taken into account, these prices will be lower the shorter the remaining duration.
So, what’s the role of the traders?
Yes, they can buy 10GB data plans, split them, and sell in smaller quantities and make a profit, but at the expense of whom?
Well, by definition at the expense of regular users who pay to much and DENT Wireless who receives less income.
The traders don’t bring in new clients as for example a wholesaler or reseller will do. (Think about the new plans for the DENT Gigastore and Cloud Stack Telco Platform)
So, the marketplace is good for users who need just a small number of MBs (less than 1 GB), and for users who can sell unused data.
But DENT Wireless can just offer smaller data plans as a 100MB, 200MB, and/or 500MB data plan. Also, there are easier ways to buy back unused data than a marketplace…
Hence, taken everything into account, this marketplace is not the originally obtained free market where market participants will dictate the market price…
On the contrary, there is just one participant, DENT Wireless, who determines the price range.
So, for me, there is no additional benefit for having this new marketplace where prices only fluctuate in small ranges, (but regular users don’t know upfront how much they will get for their unused data), and where probably just a few aggressive and quick traders will dominate this new market (just as is the case with the current “SIM” packages)…
Unless eSIM data plans of other telco providers can be traded and/or data plans of different providers can be “switched” between each other. I mean that you can, for example, transfer DENT eSIM into Truphone eSIM and vice versa.
Many DENT Token holders are looking forward to the release of the DENT eSIM unused data marketplace. And although, this feature will lead to some extra transaction volume, and it will lower the token velocity slightly, I don’t see many benefits in a marketplace just for trading DENT eSIM unused data.
Unless other participants will come on board (besides DENT Wireless and current DENT App, Team, and/or Exchange users).
Think about the Telco Trading Desk, B2B Trading Platform, or 5G Latency Trading for telcos. Or trading of unused data (either SIM or eSIM) will be allowed by (some) telco providers.
Where in the latter case, maybe it is sufficient that other eSIM suppliers will allow sharing of data among their users. This can be the start of trading mobile data on DENT Exchange if the developers team can create a smart system that automatically transfers the “to be shared data” to the buyer of this data.
So, as long as DENT Wireless is the only “supplier/issuer” of mobile data plans and package, there is no room for a marketplace. Purchases by clients from DENT Wireless can be done via the DENT Apps and all (to be developed) platforms as DENT Teams, DENT Gigastore, DENT Cloud Stack Telco Platform, DENT IoT Dashboard.
And the optional feature of allowing clients to sell unused data, can be done via a “buy back” system where DENT Wireless guarantees to buy unused data back at a lower price than the original prices (for example at 80%).
For example, an easy in-app feature where DENT Wireless guarantees to buy back unused data against preset conditions is sufficient and easier to set up (and can easily be adjusted in case market circumstances will change), and in my opinion will lead to a better user experience and higher user satisfaction among regular DENT eSIM App users.
And this feature can be launched “immediately”. No need to wait for sufficient primary sales.
BTW this feature of selling unused data is already mentioned inside the DENT App for a few months as you can see in this image… (hence time to get it launched)
But if there is no need for a central marketplace for trading either new or unused DENT eSIM data plans, what’s left to be traded on DENT Exchange?
Of course, the DENT/BTC trading pair to execute the underlying smart contracts triggers as a result of:
- In-app or platform (f.e. DENT Teams) purchases. Every time a purchase is done in USD via PayPal, Credit Card (or other payment method), the underlying necessary DENT is automatically bought on DENT Exchange (and the bought voice minutes, packages or data plans becomes available).
- Allocation of DENT incentives. The moment an incentive is given, the necessary DENT is bought on DENT Exchange, and allocated to the user.
- Automatic mobile data purchases and renewals for IoT devices or subscription plans. Again the necessary DENT are bought on DENT Exchange.
Also, the DENT token and underlying ETH ERC20 system with smart contracts still allows for blockchain benefits as described in our article What are the main benefits for DENT Wireless and DENT users of using blockchain and smart contracts?
So, does this all mean that the DENT token will be worthless?
Of course not. My advise for the management team is to focus on the roadmap and execute the vision to become “The new digital and global mobile operator” where clients can buy, share and earn DENTs and Telco assets like eSIM data plans, mobile data packages, voice minutes and top-ups with smart technical (automatic) solutions possible by using blockchain, smart contracts, and creating platforms for specific user groups and distribution channels.
And “forget about” the selling and trading features for unused data as long as other telco providers and carriers won’t cooperate, and instead offer a “simple” buy back system as USP. Or avoid having unused data at all, by offering an additional “Pay as you go” (PAYG) product.
I mean DENT Wireless is a “virtual” MNO who ultimately acts as “wholesaler” for network operators. And as these network providers charge DENT Wireless for the actual mobile usage of DENT users…
So, what’s more logical than just to charge your clients a simple markup on these actual charges considering you have the DENT ecosystem where users can do micropayments with the DENT token?
Hence, for me, the PAYG model is the perfect business model for a virtual “lean-and-mean” startup who challenges existing huge telco providers.
But even by “just” selling standard eSIM data plans, DENT Wireless has many benefits above other suppliers.
I mean if DENT Wireless has the lowest overhead, has built the whole DENT ecosystem without investing own money but instead being funded via an ICO (with an existing “war chest”), has invested time and energy in real solutions as data pooling/sharing, has an awesome developed and striking loyalty program, referral and reward system… why wouldn’t DENT Wireless succeed?
Maybe, I’m too “negative” about the chances of success with respect to a Marketplace for trading unused eSIM data. So, let me know what you think by answering this question in the Poll below…
Update: Selling unused data via an Auction system?
If we look at the current roadmap, we see 2 interesting items scheduled for the first half year of 2021:
- Launch Data Trading for eSIM on Exchange and on Mobile.
- Launch a major update on DENT Exchange to enable new kind of trading experience for mobile assets.
After trying to think about what this new kind of trading experience could be, and re-thinking about how to set up the marketplace for selling unused DENT eSIM data, I got this idea…
Introduce the marketplace in the form of an Auction.
So, what do I mean?
For example, if a user has a leftover of 2.3GB with 183 days validity, he can just offer this full leftover data plan for “sale” (or a lower chosen amount of GB, but with the same remaining validity), where he can set a minimum wanted price in DENT, and an optional “maximum sales price”, where if a buyer pays this amount immediately gets the data plan for that price. (The maximum price can also be left out)
Potential buyers can bid, for example for the next 24 hours, and the highest bidder gets the leftover data plan at the end of the auction (or the auction ends earlier if the maximum sales price is paid).
And if there are no bidders or the minimum price is not reached, the seller has to wait for 7 days before he can offer his leftover data on the auction market again (to avoid an endless number of “unsellable” auction items with too high minimum ask prices).
This way, sellers know upfront what they will get as a minimum (and optional maximum) price. And daily there will be a clear and reasonable number of leftover data plans on the market.
Furthermore, this auction model takes into account the remaining validity, and gives potential buyers (or traders) all kind of choices with respect to data size and validity.
Also, this model can also “halt” the “aggressive and fast” traders who otherwise buy all the “cheap” offers and can set their prices immediately higher. First, the 7 days “cool-off” period will also be applicable for traders. Secondly, traders (and buyers) have more time to bid and the otherwise possible large bid-ask spread (that can possible result in inactivity and no transaction at all), will be replaced by an “active” auction where the highest bid price will increase with every bid.
Finally, DENT Wireless can also enter the auction market with its own (created) offers.
Either to test certain size/duration combinations to see what users are willing to buy, as marketing campaign, (for example during the Olympics where DENT App users can bid for a data plan that covers Japan with validity during the Games), or to feed the market in case there are too few open auction items.
Of course, DENT Wireless won’t use the Auction market to manipulate prices but just sets an initially (low) minimum price where buyers/traders will push the price higher with their bids.
By (incidentally) using this “secondary” auction market to sell data plans with lower validity than 365 days (and/or country coverage instead of worldwide coverage), DENT Wireless can keep the prices and data plans on the primary market as usual and hence there will be no conflict with the “one world, one year, one plan” philosophy.
So, what do you think about this “Auction” model?