Blog from Cisco's Mobility Community, https://www.myciscocommunity.com/community/sp/mobility

1. Service Provider Mobility: Mobile Broadband:
In Search of a Better Bundle
Posted by Brian Walsh Aug 14, 2009
In a previous blog, I discussed ways in which mobile operators can offer win-win
subscriber services that let users access the abundance of mobile internet applications
while addressing the operator threat from services substitution and revenue-less traffic
growth. One approach in mobile broadband is “the bundle” – mobile data service plans
that provide a combination of on-deck and internet-based services. Fixed broadband
providers have long offered “Triple Play” bundles of voice, video, and data. Some have
added in mobile services for the so-called “Quad Play” (thus turning the original baseball
analogy into a mixed metaphor!). But how effective has the bundle been for mobile
operators?
The Basics: Many operators are offering “flat rate” mobile broadband plans, typically in
tiered levels of maximum monthly fair usage policy (FUP) quotas. Plans from operators
such as AT&T, T-Mobile, 3 Sweden, Network Norway, and others offer “Light/Medium/
Heavy” usage packages at different price points based on the size of FUP allowances.
Pricing further varies by the length of the contract and whether the subscriber connects
to the 3G network with a smartphone or a dongle-connected laptop or netbook. These
bundles give subscribers a “pay for what you need” option at the data usage level.
Once monthly quotas are reached, operators are employing a range of ways to notify
subscribers and/or restrict services while maintaining subscriber satisfaction (and
retention!). The risk of a billing surprise can still be great, especially for 3G dongle users
who consume bandwidth with “fixed line behavior”. Often users do not even have an
understanding of their monthly GB limits or the extent of the financial risks they incur!
The Wi-Fi Extra: Several operators are giving users something “extra” on top of mobile
broadband by bundling Wi-Fi access. Operators are partnering with hotspot providers
and/or leveraging their own Wi-Fi networks to gain competitive differentiation and
provide additional value for their customers. For example, AT&T offers iPhone and
BlackBerry users free Wi-Fi at certain public venues. According to AT&T, nearly 15 million
users connected to their public wireless hotspots in Q2 2009, a 41% increase from the
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2. Service Provider Mobility: Mobile Broadband: In Search of a Better Bundle
previous quarter. [Note: Trend continued in Q3 2009 when AT&T reported that more
than one-half of all Wi-Fi connections were made by smartphones and other integrated
devices vs. laptops.] T-Mobile smartphone users can use Wi-Fi at T-Mobile hotspots
as part of the company's HotSpot@Home service. This type of bundle gives users
greater connectivity options while also offloading traffic (and costs) from operators’ 3G
networks, benefiting all network subscribers.
The Fixed-Mobile Bonus: Not surprisingly, operators with both mobile and fixed
broadband networks are offering this logical bundle extension to the mobile broadband
bundle. For example, Verizon is giving its FiOS customers free Wi-Fi access at more than
100,000 hotspots around the world. BT’s Total Broadband gives customers Internet
access over its 3G network per FUP-based tiers with unlimited usage when accessing the
Internet over BT’s Wi-Fi hotspots.
The Personal Touch: a Bundle for Me! All of these bundles are attempts by operators
to simplify their offers, create additional value for subscribers, and cross promote
services – in the quest to drive higher customer adoption and retention. But these
early approaches are still primitive, where the focus of the bundle is largely at the
network access level. The real promise of Mobile Internet monetization will be reached
by operators that can offer subscribers the ability to flexibly choose and pay for
applications and services that they want. Operators will increase customer “stickiness”
with user-controlled personalization and can drive higher ARPUs from the deeper market
segmentation enabled by subscriber personalization. A positive step in this direction
comes from operators who have begun to offer what might be called “personalized
paks” that target certain subscriber demographics. 3 Australia, for example, offers a
wide range of mobile broadband packages grouped into themes such as entertainment,
news, sports, social networking, etc. The packages contain both on-deck content and
services as well as access to favorite 3rd party internet applications. While risking some
confusion over the range of bundles, the demographic and theme-oriented services
bundles make it easier for subscribers to select a mobile broadband plan that appeals to
their interests (and the capabilities of their mobile phone). Just got a new video-friendly
device and don’t want to ever miss the latest cricket highlights? Subscribe to the Mobile
Internet Sports pak!
Operators are beginning to deploy intelligent IP networking capabilities that give them the
subscriber, session, and application-aware intelligence needed to offer subscribers the
ability to personalize their service subscriptions and usage. Even more importantly
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3. Service Provider Mobility: Mobile Broadband: In Search of a Better Bundle
for operators’ revenues, these capabilities will give their marketing organizations the
business flexibility to cross-market add-on services, loyalty programs, customized
advertising, promotions, bi-directional partnerships with 3rd party content providers, and
more.
Have you seen other mobile internet services that include innovative user personalization?
2,199 Views Tags: mobile, mobility, 4g, 3g, bundles, mobile_internet, mobile_monetization, mobile_operators,
mobile_broadband, ip_intelligence, personalization, mobile_applications
Aug 17, 2009 10:35 AM Andrzej_Milkowski
Hello Brian
Looking for alternative strategies, I think, it is worth to observe what is going on around
iPhone applications (Widgets) as well as Google mobile services. Both, provide light, useful
and "relatively chip" widgets helping customers on-the-move on-demand simplify their live.
From operator's perspective, offering flat rate mobile broadband plans was almost a
must for us, as long as properly defined standardized "PCRF" solutions are not available.
Once technology giving operators flexibility, like in case of voice contracts, will be given to
customers, it will be easier and most important PROFITABLE to go that path.
I do not buy idea that giving "more for less" (in this case bundling) is better. I follow strategy
of personalization, or rather call cluster based targeting personalization.
Regards
Aug 17, 2009 1:52 PM Brian Walsh Andrzej_Milkowski in response to
Andrzej
Thanks for your reply and thoughts! I agree widgets and mobile "cloud" services are also
exciting developments for new mobile applications and services. A couple of questions for
you if you don't mind:
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4. Service Provider Mobility: Mobile Broadband: In Search of a Better Bundle
- What kinds of services do you think operators will offer once standards-based Policy
solutions are available or mature enough for deployment?
- and can you expand upon what you mean by "call cluster based targeting personalization"?
It sounds interesting :-)
regards
Brian
Aug 18, 2009 9:25 AM Andrzej_Milkowski Brian Walsh in response to
To answer to first question, our Marketing initially was interested in offers like:
1. Time based charging. E.g. "internet for 2 hours" or "low cost access between x hour and y
hour".
2. To get P2P users from ADSL contracts (surprise, surprise:-) ): "night fetch, no limit".
3. QoS - Gold, Silver, Brown - differentiate accordingly to e.g. Business, Postpaid, Prepaid.
4. Special bundles for users with modern terminals like Android, iPhone etc.
I shall write "Call it cluster based targeting personalization". I mean the personalization is
limited to some defined scope of flexibility. E.g. we can not offer to user possibility to change
any parameters of the offer due to fact it is to complex. It is easier to first understand target
groups of users and address them with scoped flexibility.
Sep 16, 2009 8:28 AM Brian Walsh Andrzej_Milkowski in response to
Andrzej,
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5. Service Provider Mobility: Mobile Broadband: In Search of a Better Bundle
Thanks for the clarification. "Cluster-based targeting personalization". I like it! And it makes
sense as you say to offer target group-level personalization in order to limit the complexity to
the network.
So, of your consideration on offers 1 - 4, any early results re. customer acceptance?
Especially #4, with nextgen smartphone-based bundles?
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