With the final entry in the Six Degrees of Mobile Data Plan Innovation blog series, Alcatel-Lucent’s
Rich Crowe (@rhcrowe) looks at how mobile operators can use (and are already using) the six degrees of mobile data plan innovation to capture and deliver more value.
The Value of a Gigabyte
What does a gigabyte mean to you? Is it just a unit of data or something concrete, like a movie or 250 songs? Maybe it’s a means to share news and pictures and stay connected. These are things with value. If you’ve got a mobile device, a gigabyte offers the freedom to take your movies, songs or connections with you anywhere you go. A mobile gigabyte can even deliver peace of mind by supporting applications that tell you where you are and how to get where you’re going at any given moment. This flexibility is also valuable.
Are some gigabytes worth more than others? Are gigabytes delivered in a fast and uninterrupted stream worth more than those that come slower with pauses and buffering? What about gigabytes that can be shared with others?
Yes, gigabytes have value. How much value depends on their quality and the way each individual uses them. It takes innovation to deliver and capture that value!
Every mobile network operator wants to get more value from mobile data. But today’s unlimited and basic tiered data plans ignore the value that mobile data offers to subscribers. By offering a set amount of data for a set price, operators make mobile data a commodity and encourage consumers to shop for the lowest price per gigabyte. To capture the true value of mobile data, operators need to change the way they think about – and define business models for – mobile data services.
For mobile operators, success– both in terms of customer satisfaction and profitability – means recognizing that mobile data delivers tangible value to customers. Just as important, it means understanding that individual customers value mobile data based on their own interests and the way they use their services. Traditional mobile data plans can’t deliver success on these terms. Operators need new and compelling plans that can reinforce the value of mobile data and better meet the unique needs of each customer.
The Six Degrees of Mobile Data Plan Innovation blog series introduced six different ways for mobile operators to build highly personalized pricing options and showcase the value of mobile data. These innovations will help operators offer differentiated service levels and present more value-based options to subscribers and businesses. The six innovations are:
- Service level-based plans: Offer premium services that deliver a higher speed or QoS.
- Shared data plans: Let several users or devices connect to and share a common pool of mobile data.
- Application-based plans: For a monthly fee, allow users to consume data with selected applications without having the usage count against their monthly data plans.
- Third party pays plans: Offer toll-free access to specific content, with the content provider or another business paying for the data subscribers use to consume the content.
- Loyalty-based plans: Reward loyal customers with mobile data and partner with retailers to include mobile data in their loyalty plans.
- Capacity-based plans: Shift traffic to off peak, create services to consume off-peak capacity, and monetize peak data traffic.
Three key factors will shape the way a mobile operator applies the six degrees of mobile data plan innovation. The first is whether the operator’s mobile data market is mature or emerging. The second is whether the operator is a leader or a challenger in its market. The third is whether the operator’s competitors are introducing data plans that must be matched.
To get some perspective on the influence of these conditions, let’s look at some real-world data plan innovations that have been announced this year.
Application-based plans bring mobile data to more people
Emerging mobile data markets have introduced application-based plans that make mobile data accessible to more of the population. Once a market is established, some new mobile data customers will recognize the value of mobile data and want to do more with it – a key step toward becoming paying customers. Here are two examples that show how operators in India are using application-based plans to expand their market reach:
- Reliance Communications partners with Twitter to offer free, unlimited access to the service in India
- Airtel partners Google for Internet services
Shared data plans provide differentiation in mature markets
Mature mobile data markets are seeing an increased focus on shared data plans. In some cases, the operators introducing these plans are market leaders seeking new ways to differentiate. In other cases, operators are introducing shared data plans to respond to successful competing offers. Here are a few examples that highlight the global rise of shared data plans in mature markets:
- United Kingdom: EE unveils latest innovations as 4G customers pass half million mark and Vodafone set for shared data bundles in 2014
- New Zealand: 2degrees' one data plan to rule them all
- United States: US Cellular to introduce shared data plans in coming weeks
Loyalty-based plans offer mobile data as a reward
The idea of using mobile data as a loyalty reward has hit the mainstream with the launch of Aquto’s Kickbit application. This application rewards users for engaging with advertisers and shopping for goods and services. Already offered by Verizon Wireless and Vodafone Portugal, Kickbit will help subscribers get and use more data without putting further strain on their budgets.
Third party pays plans get a closer look
Though not launched yet, third party pays plans are getting serious consideration. For example, ESPN has talked with at least one large U.S. carrier about subsidizing wireless access to its content. It’s only a matter of time before a mobile operator launches a plan that lets subscribers consume quantities of video content with the content provider or another party paying the bill.
What’s next on the horizon? A plan just for YOU!
The next evolutionary step for operators may be to personalize the mobile data plan using the six degrees of mobile data plan innovation. This kind of evolution will demand an offer orchestration system that can identify offers that have relevance and value to individual subscribers. The system will need to present these offers in a manner that is easy to understand and accept. By getting more personal with data plans, operators can deliver even greater value to subscribers.
What’s next for the Six Degrees series?
This fall, we’ll release a new e-book on the six degrees of mobile data plan innovation. The book will include new insights, deeper research and updated analytics on user behaviors and trends in mobile broadband. Sign up now and we’ll send you a free copy of the e-book as soon as it’s released.
What innovations do you see in the mobile data market today? If you’re a mobile operator, what innovations are you planning (that you can discuss)? We’d love to hear from you in the comments below.
Thank you for reading our blog series. We look forward to innovating with you!