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Dispensing with “all-you-can-eat” data plans was the first step towards monetizing mobile broadband. Now some mobile operators are considering how to implement stage two: charging different pricing for different online applications to boost profits.
At the TM Forum Management World conference in Dublin, Ireland, mobile operators discussed managing and monetizing data usage, charging customers different rates for using various online services and applications. Total Telecom covered the conference and found mobile operators conjuring up new pricing schemes to maximize revenue opportunities.
Vikram Chadha, senior marketing director at United Arab Emirates-based Du, offered that mobile operators should bill for video traffic separately from standard data.
″Video is another beast,″ Chadha told the audience of executives. ″Operators need to look at video data in a totally different manner. It’s important to treat video as a different data element.″
Monetizing video streaming can “get high value out of that customer,” Chadha said.
Chadha
He also believes as general browser traffic declines, real money can be made charging different rates for customers accessing different apps. Providers could charge higher data pricing when customers use certain non-preferred apps, at the same time discounting traffic from apps that partner with wireless phone companies.
Chadha pointed to NTT DoCoMo’s partnership with Hulu. Both Hulu and the service provider market the service, with the one making the sale the beneficiary of most of the proceeds. That technically takes revenue away from Hulu and diverts it to NTT, which can engineer customized marketing efforts to target customers for the service.
But it does not stop there, according to Chadha. Mobile operators can generate even greater revenue by introducing Quality of Service (QoS) technology and billing customers extra for additional priority on the company’s wireless network, an important consideration for online video.
Chadha says his company now charges $1.25 for 30 minutes of video streaming from YouTube using “best available” network protocols. Customers who want to assure minimal buffering can buy a VIP Pass from Du for $2.50 for the same 30 minutes, and get priority on Du’s network.
″The [VIP pass customer] is assured of the bandwidth he gets and that gives the operator the opportunity to maximize his revenue,″ he said. ″[Apply] different QoS for different apps and you can charge differently. Or use location, and sell data more cheaply where networks are less congested, or at less busy times of day.”
Chadha’s worst enemy would be a strong Net Neutrality policy, which would prohibit operators from discriminating against or prioritizing different types of traffic. None of these pricing schemes would likely work if Du provided a flat rate mobile service either.
In the absence of such net protections, revenue and profit opportunities abound.
″Application-based charging is going to be very important and so is value-based charging,″ he predicted.
Other stories of interest:
- What Spectrum Crisis: Verizon Wireless Tries to Monetize Video Usage With New App
- Tough Luck Mobile: T-Mobile Says Get Off Our Network – Download At Home; Slashes UK Usage Limits
- Mobile Phone Companies Seek to Curtail Free Text/Calling Alternatives
- European Mobile Broadband Providers Admit Usage Caps Designed to Deter Usage, Investment In Networks Anti-Profit
- Asian Wireless Broadband Learns from North America: Internet Overcharging=Fat Profits
Good luck trying to get those rates in the US. Mobile providers would have to drastically increase prices and decrease service quality to meet what he’s mentioning…not gonna happen with Sprint and TMobile being uncooperative with expensive, capped data packages.
@Ian, you may want to re-read the story. Chadha is describing yet even more monetization of cellular data plans by charging even more fee’s in addition to your monthly voice, your data package, your features, and then you’d also now have to pay an extra $1.25 per half hour of streaming video over your phone or $2.50 if you want packet prioritization on that data for faster delivery…
This is the same technology sold by vendors that enables providers to block you from accessing categories or specific web sites such as HULU unless you pay them an extra $5.00/mo. This just takes it a step further turning the dial back to the 1980′s-90′s charging per minute fees.
Yes, MetroPCS has plans like this right now. I have no issue with device-specific limited data plans (ie. Kindle to Amazon, a Facebook phone to Facebook, etc.), but a general smartphone service carved up into a-la-carte menus with surcharges for “value-added” services is just more gouging.
You don’t hear these providers at these conferences complaining endlessly about spectrum crunches. They spend all their time talking about how to create new revenue streams, find new ways to charge extra for different types of traffic, and introduce their own premium streaming services that are counter intuitive to their own propaganda about data tsunamis.
An optimal balancing required all right, but ” tiered pricing ” is definitely part of tomorrow’s offerings to give ” different segments of customers and operators” their desired and affordable sweet spots of happiness
Jagat