There are many options available for Mobile Operators who want to “monetize” the investments they have made in 4G or LTE.
For example, today, most Mobile Service Providers (MSPs) still maintain flat rate tariffs that provide a bundle of both voice minutes and SMS, often combined with “all you can eat”/unlimited mobile data plan.
However, with the introduction of 4G or LTE, techniques now exist that will allow Mobile Operators to control the subscriber experience by regulating the Quality of Service (QoS) assigned to mobile data service. Specifically, the technology introduces techniques such as QoS Class Indicators (QCI) to essentially assign the amount of available network bandwidth and resources that can be applied to a specific service and even a specific customer.
Mobile Data Services and QoS
There was always a debate as to when we would see this shift in how mobile data service would be billed or tariffed. The first evidence of these new mobile data service techniques are outlined within a whitepaper recently published by Openet. The paper provides a number of examples of innovative data-centric plans that some MSPs across the world are now adopting.
The examples illustrate where Mobile Operators in Europe have designed data plans based primarily on bandwidth or speed. Two such Operators are A1 in Austria and Swisscom in Switzerland.
A1’s plan is simple. You pay a flat rate per month based on the bandwidth or speed you require (upload and download). At the same time, you have a consumption or download limit.
If subscribers utilise all of their monthly allowance (in terms of consumption), they are then throttled back to a lower “speed” or throughput. At that point, customers have the option of buying additional bundles/add-ons where the “speed” is then restored. Of most significance is the fact that within each plan, both voice minutes and SMS are unlimited.
The approach by Swisscom is similar, but without a cap on actual consumption or usage. The report also publishes the ARPU profile of those Swisscom customers who migrated to such a plan. Initially, related ARPU declined when the plan was introduced. However, it began to grow and indeed surpass previous ARPU levels as more customers migrated. Thus, the customers (and Swisscom) realised the value of Service Quality rather than Quantity.