|B/OSS Insider Blog|
Bundling the Benefits of LTE
By Timo Ahomäki
Last week the Global Mobile Suppliers Association (GSA) confirmed that 113 operators have now launched commercial LTE networks across 51 countries worldwide. This is expected to rise to as many as 209 operators by the end of 2013. With LTE hitting the mainstream at such a fast pace, it has never been so important for service providers to cater for more and more complex service bundles.
With such a huge amount of investment made in LTE networks worldwide, it’s critical that CSPs learn from the challenges encountered around the earlier 3G rollout. What we saw in the leap from 2G to 3G was that many services were hyped, but struggled in practice, not actually sparking consumer interest. In the extension of today’s 3G-to-4G networks, no doubt CSPs will be keen to make sure that history does not repeat itself — instead being mindful that the technology is fully functioning and that consumer demand for services is strong, to make the most of the super-fast mobile Internet speeds.
What we have actually started to see is that many have positioned 4G service contracts as a premium offering – but for a wide customer base. Through added "extras," operators can demonstrate the main selling point of LTE price plans, namely the increased access speeds. To achieve the most impact, the industry has already started to see some operators use entertainment services in contract bundles as a way to showing off all the benefits of 4G.
For example, in the U.K., newest 4G mobile operator EE is offering its customers bundles to include free weekly movies, games and music services. What’s interesting with this approach is that it lets the customer choose which premium services they would like to try for free each month.
This is clever as it allows customers to trial services they may not have before considered, opening up the likes of mobile TV and gaming to a much broader audience. It also encourages cross-sell of brand new services as soon as they come to market, as these subscribers can effectively try before they buy.
Having already implemented the processes and tools that can help identify which services are most important to the user, personalized packages can also be offered. For example, the operator may see that the user never makes use of the free monthly film, and instead offer a different service that demonstrates the benefits of LTE. This personalization of bundled services will in turn increase customer loyalty to the brand and potentially reduce churn.
However, it has to be expected that the sudden uptake of all these multimedia services may put an increased pressure onto the CSP’s backend processes. Operators must therefore be prepared to scale up as required to cater for this increased demand; at the same time, ensuring that data becomes and remains a profitable business channel for them.
Timo Ahomäki is chief technology officer, Tecnotree Corporation.