While you were looking the other way

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While you were looking the other way

Customarily, I am the first one to join in when people start complaining about operator innovation.  After spending a couple of days with a bunch of mobile operators last week at Informa’s Mobile Data Pricing event, I’ve changed my tune and feel that actually – we have reason to be optimistic.  It seems the whole ethos of pricing is on the move. OK – so not everyone is moving at the same pace or even in the same direction, but the wheels have begun to turn.

I gained some very interesting insights from participants in a workshop that we ran prior to the event.  We were fortunate enough to have a rather animated workshop with several operators from some very different places. It quickly became clear that geography and demography are two very important factors when it comes to mobile data usage and pricing.  We continued to delve down into topics such as price elasticity, buyer personas and technical requirements for most advanced real-time charging uses cases.  In the end, we may have learned just as much as the operators, so thanks to everyone that came along.

One of the most noticeable standouts for me during the conference was pervasiveness of the term “value-based charging” or “value-based pricing.”  It seemed to me that most players have embraced this term as the basis of how to evolve charging for mobile data (and probably not just mobile). The underlying concept is quite simple. Find the value to each member of the ecosystem – and the pricing will naturally follow the value.  So, if HD video streaming is particularly appealing to a subscriber, he/she is probably willing to pay more for a consistently great viewing experience (for the techies out there – this use case utilizes technology such as video caching, optimization and real-time charging among others).

I often use my mother as a great example of a mobile Internet user that leans toward a more basic Internet experience (no offense Mom) and will not use resource-intensive content (such as video or P2P). These customers visit the same couple of websites and send a few emails each day – not taxing the network – and they expect a lower price point for their perceived value.

My son is six and he has already decided that he wants to be a quiz master when he grows up (I know, too much TV and Internet). So whenever I walk in to the house he has a bunch of questions for me.  Here’s one for you…

Question: We all know it costs the operator a lot more to carry 1 hour of HD (1080p) streaming video than it does to carry a 1-hour VoIP call, but what is the value of this carriage to the subscriber?

Answer:  It depends on the subscriber.

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