Blyk, the UK-based MVNO that offers free mobile airtime in exchange for advertising, has cut back on the amount of free usage it’s giving its members these days. Citing the recession as the reason for the cutbacks, Blyk is maintaining the notion that it’s “better to have Blyk, than no Blyk at all.”
In the UK, where it serves around 200,000 members, Blyk changed the terms of it’s service and instead introduced a new £15 allowance ($22.19)- enabling any combination of “free” voice, text and data usage at prepay rates, with data charged at £1 per MB ($1.48). Blyk users quickly calculated that at those rates, they were around £13 per month ($19.23) worse off than before. The complementary usage value went down to around $23 per month instead of the $41 per month it used to be, which is a substantial drop.
After an obvious outcry by its users, Blyk quickly stated that “we know that you have concerns about the new terms and we’d like to give you some background to these changes. No one, including us, knows how the economy will fare in 2009 and beyond.” They claim it’s a preemptive business tactic to better prepare for a prolonged recession, which may prove to be a smart move, but you have to wonder why they would make such an extreme cutback to the bread-and-butter of their service. They know the business model will work, overall, so why mess up a good thing.
On the other hand, the business model may not be working as well as it once did. A cutback of this magnitude might be an indication that the free network usage its giving away for free is costing more than the advertising revenue it’s taking in. If one thing’s for sure, it will show just how loyal Blyk users really are, and whether the idea in general can make through these tough economic times.