Tuesday, February 23, 2010

“All you can eat data” going on a diet

by Karen Coppock


During the Mobile World Congress in Barcelona last week one thing became clear, the days of flat rate data plans will soon be coming to an end. This shouldn’t be a surprise to anyone in the industry; it simply isn’t a sustainable model for operators. The challenge, however, is to develop new pricing models, which make financial sense and are also acceptable (and understandable) to customers. During the session Strategies for Growth - Segmentation & Pricing, at least one panelist suggested volume-based pricing. But how much of the general public really understands bytes and should they even have to? The panel acknowledged that they would need to educate the consumer, but is that really optimal?

An alternative approach was suggested by an Alcatel-Lucent executive in a session on LTE later that week - price per experience. He noted that consumers can judge the value of downloading a song, watching a video or live TV broadcast or viewing an email message much easier than trying to figure out the quantity of bytes consumed or downloaded. This approach will also require consumers to associate prices with individual activities or items, which also may not be optimal.

Operators will likely experiment with a wide variety of models, the one exception being unlimited data...

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