Its been a while since I blogged about pricing strategies (see old posts here, here and here). I recently enjoyed listening to Soichi Nakajima, Director of "Digital Telco and OTT" at IDATE DigiWorld when he presented a talk on LTE pricing strategy. The slides are embedded below
I think the slides are self-explanatory but here is the summary worth highlighting:
How LTE plans have changed: shift in focus from data allowance to quality of service
- Mobile data services are still largely structured by on data allowance, but high volume and unlimited plans are increasingly common.
- Unlimited does not necessarily mean high-end: some target users with a small budget, providing a very slow connection.
- Quality of service becoming central in structuring product lines – especially speed which my or may not be combined with data caps – as is content quality.
- Certain applications being favoured through zero rating (traffic not deducted from the customer’s allowance). This can be a way to market unlimited plans and avoid fixed-mobile substitution.
- Growing number of partnerships with OTT video services, rather than selling premium content plans, which are tending to wane.
The slides are available to download from techUK page here. There is also a bonus presentation on "How to address the challenges of providing connectivity on trains".
2 comments:
One of the thing HK customers has shown is that most don't care about speed. There were recently some unlimited plans that were capped at 21Mbps for the first 5 / 12 GB and 386 Kbps there after. It was nearly half the price of the full speed plan and were immensely popular.
Given there will be lots of Small Cells / LAA planned and Massive MIMO upgrade, my guess is that network capacity will dramatically increase and all networks will try to grab as many customer as possible. Which will create a price war.
The so call quality of services hasn't worked out well because, those 600 / 1.2 Gbps 4G Speed were never achieved in real life anyway.
Interesting observation from HK, but it is not surprising, consumers like simplicity and certainty. The telco/3GPP ecosystem loves ideas around QoS but my personal feeling is that this is just adding unnecessary cost (and complexity) to the systems... Its not a lesson being learned for 5G though..
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