Innovation-seeking Brazilians bitten by the video-calling bug have expanded operator Claro’s subscriber base by 62 percent per month over nine months following the launch of video-calling services by Ericsson.

In February 2008, Claro Brazil launched its first 3G-enabled video-calling service in six major cities using Ericsson’s Video Gateway System and an Ericsson web application, Video Web Phone, which runs on this platform.

The key objective was to test the market for high-quality, high-speed services powered by 3G, by providing interested customers with the opportunity to make video calls without necessarily owning a 3G phone.

Decio Farias, Marketing Manager for Claro’s Video Calling Services, says: “In Brazil, the average consumer doesn’t really understand what 3G means unless it involves lower tariffs. Therefore, we decided to focus on launching video phones because this helps distinguish us from our competitors and attracts customers who are interested in innovative, futuristic applications.”

This approach has already produced solid results, with Claro seeing a 62 percent monthly increase in video-call web subscribers between February and October of 2008.

“We started out with about 210 new customers in February, a humble start. But by the end of October, this number grew to 16000 resulting in an expansion of the subscription base by 7619 percent,” Farias says.

One feature that contributed to this growth was a collection of bundled price plans to help attract and keep customers.

“Some of the incentives we offered were free minutes to provide customers with the opportunity to try out the new service, and a proportion of paid-for minutes dedicated for video calls within a 3G price plan,” Farias says.

Claro also offered data-plan incentives.

“Some customers were more interested in purchasing an attractive data plan so we offered a package involving 100MB whereby you paid for 100 minutes of local calls and got 100 minutes to make video calls for free,” Farias says.

Both plans have worked well, leading to a healthy rate of adoption of the new service, an increase in 3G phone sales and an expansion of the subscription base.

Video-call web usage (in minutes) witnessed a 12 percent monthly increase from February to October 2008, and video-call peer-to-peer usage (in minutes) increased by 10 percent per month for the same period.

In a country as large as Brazil, the opportunity to make video calls from a PC has proved attractive to families and friends separated by great distances.

“When we spent billions to update our networks to 3G in early 2008, we wanted to launch a service that would meet Brazilians’ aspirations,” Farias says.

“Our marketing focused on the futuristic aspect of this service, tying it in with the well-known and well-liked TV series Star Trek: Enterprise.”

Equally crucial, says Farias, was Ericsson’s involvement from the very start.

“We found a great partner for 3G in Ericsson. They provided us with the right solution that we could adopt straight away, and offered it to us at an attractive price, backed up with their technological expertise and evidence from other parts of the world where video calls have been successfully introduced and adopted.”

Alexandre Olivari, Ericsson’s key account manager for Claro, says: “For now, 3G penetration in Brazil is quite low compared with GSM. What Claro has done by launching its 3G video-calling service is set itself apart from the competition, attracting the early adopters and giving itself a strong brand position.”

By Lisa Kullman