By Stephane Honore
The latest tiered pricing announcements by AT&T Inc., O2, Sprint-Nextel Corp. and other major mobile operators are the shots across the bow in a new pricing war. This hypercompetitive battle for subscribers will be largely fought within the data services arena where a new weapon will soon emerge: personalized pricing plans and contextual metering. The successful operators will be the ones who can read market trends and react by launching creatively targeted pricing plans that match their users’ needs and behaviors, quickly and cost effectively.
Traffic throttling and traditional data volume metering will not be enough to remain competitive; it won’t deliver pricing options adapted to the evolving and increasing usage of mobile broadband. Operators will soon have to embrace dynamic and contextual pricing models that take into account who the subscriber is, what kind of content he is accessing, when he is requesting this content and under which conditions he is requesting it.
Contextual metering leverages far more variables than today’s basic pricing tiers. A hypothetical tariff in the near future could look like this: 200MB of data per month for $15, with a 10MB roaming day pass for additional $2; it would include unmetered “Qik Service" and unmetered browsing within the “HomeZone" or over 2G access.
While operators are using caps and volume tiers to cope with the increasing data traffic volume, marketing organizations are hard at work creating a portfolio of data plans that hit the sweet spot: retain the heavy users and attract infrequent users (and encourage them to use more), while appearing flexible and fair to everyone. It won’t be long before operators have to create new, more advanced plans more often as market acceptance of new pricing options grows. We saw this happen in voice with Friends & Family plans, Favorite 5 plans, rollover minutes, etc. Data will surely follow this trend.
