Mobile Price Wars and Apps - Yes, Apps!

Jim Machi : Industry Insight
Jim Machi

Mobile Price Wars and Apps - Yes, Apps!

updated golden house.png

There’s been a lot of talk recently in the United States about mobile price wars, such as Quartz’s and Reuters’ reports on T-Mobile’s aggressive move to win over customers from AT&T and Verizon. If the combined voice/data average revenue price per user (ARPU) is dropping everywhere – as it is in Europe according to GSMA Intelligence research, and in the U.S., according to Chetan Sharma Consulting – where will service providers go for new revenue? Clearly a price war is one way to try and win new customers, and thus increase revenue, but it’s not going to increase the ever important ARPU.

What can service providers do? I’ve been writing for years about the need to get new applications, such as location-based services or mobile advertising. Chetan Sharma has characterized the need to get new revenue streams as the “fourth wave.” In fact, I see evidence of this from AT&T, which is my carrier now. Yesterday, I received a piece of mail, a brochure about “AT&T Roadside Assistance.” I have been a AAA member for years, and they’ve provided a tow truck or an engine jump when I needed them, but I am wondering more about this offering from AT&T. It might come down to pricing, but in that case, AT&T wouldn’t be fighting Verizon or T-Mobile; they’d be trying to focus on ARPU and revenue increases instead. If you’ve seen AT&T Digital Life commercials, AT&T presents offerings beyond the standard talk and text plans to connect your home and your personal devices; many other service providers have similar kinds of offers coming out.

This, in fact, is evidence of the fourth wave that is coming. I’m sure there will be much more competition to offer new services as the ARPU and revenue battlegrounds shift. It’s no accident that value-added apps would lead the fourth wave charge. The first and perhaps most successful value-added service was texting. So, when times are tough, look back to the past. 

Now, of course, much more is possible, but in the end, these all need software-based media servers that can scale to accommodate traffic while handling different sources of voice and video. In the meantime, I guess we’ll be seeing some traditional pricing wars.

What new feature do you wish your mobile carrier would offer? Tweet us your wishes at @Dialogic, or tell us on Facebook.

Enhanced by Zemanta

Related Articles to 'Mobile Price Wars and Apps - Yes, Apps! '
WebRTC2 pic.png
dialogic baseball web small.jpg

Featured Events