How To Monetize Voice Through Bundled Services

By Timo Ahomäki

Over the past few years, operators have been under increasing threat as over-the-top (OTT) service providers continue to encroach on the traditional telecom market, cutting operator margins. Operators are therefore now faced with the challenge of how to monetize voice-based services in order to maintain, or even increase, the average revenue per user (ARPU). Perhaps something that is easier said than done.

During a two-month study of consumer smartphone usage from Analysys Mason, "traditional" voice services were used by approximately 20 percent of VoIP users. This indicates that there is a significant demand for OTT services, and with the continued increase in smartphone adoption and rollout of faster networks, it’s clear that it is here to stay.

The danger is, therefore, that mobile operators will become marginalized within their own industry. They may become relegated to provide secondary voice services as they pick up the 30-40 percent of call traffic, for those outside of the user’s core calling circle.

One way that operators hope to avoid this is through the use of bundling.

Bundled packages involve operators selling multiple services together, effectively packaging other services along with voice into one payment packet. There is no limit to the kind of services that this could involve, a few of the more common examples being the provision of SMS, social media or visual voice mail. A customer’s primary interest in an operator may therefore move away from being voice services, even though they will still receive this as a service.

The true appeal of bundled packages for customers comes when a layer of personalization is added to the bundle. For operators to identify a user’s key service requirements and then offer a package that is tailored specifically around their needs increases the likelihood of brand loyalty, reduces potential churn and increases ARPU.

An example of a personalized bundled package would be for a consumer who is a particularly heavy user of social media to have their voice package "bundled" with an option for unlimited use of Facebook. The operator is therefore enabling the user to access and use the service that is most important to them in an easy and cost-effective manner, while also retaining them as a voice customer.

With this in mind, it is therefore important that operators implement processes and tools that can identify which services are most important to the user, enabling these personal packages to be offered. These bundles will allow operators to monetize the voice offering, while the personalization of these bundled packages increases customer loyalty to the brand and potentially reduce churn.

Timo Ahomäki is VP, product management, Tecnotree Corporation.