Mobile operators will abandon network cost-based pricing to focus on premium services, as they look to reduce churn and maintain revenues according to a new paper released by global telecoms, media and technology (TMT) adviser Analysys Mason. This transformation, enabled by new end-to-end approaches to network management, arrives in the face of growing competition from over-the-top (OTT) services and rapidly rising data costs.
The report estimates that the volume of wireless data traffic worldwide will grow at an annual rate of 67% between 2010 and 2015. During the same period, data revenue per gigabyte is projected to fall from USD23.21 to USD4.27. The report reveals that, in order to handle this growth whilst assuring revenues, operators are increasingly looking to offer new services such as temporary network speed boost and tiered bandwidth allocation to create a premium service for high value customers.
Patrick Kelly, Research Director at Analysys Mason, believes that average revenue per user (ARPU) will increasingly be related to additional services: “Operators are facing increasing pressure to deliver a high quality service despite growing data demands. The only realistic way to do that is to decouple ARPU from network costs and instead align it to the delivery of premium services.
“Previously, there was a lack of availability of tools to support complex segmentation of mobile data services. As the focus shifts towards maintaining revenue for data services, more operators are adopting the increasingly sophisticated tools to manage tiered services,” said Kelly.
Interviews with operators have shown that the main obstacle to the delivery of these services is their ‘silo’ approach to network delivery, which hinders a full view of the customer experience. Operators are increasingly employing end-to-end network monitoring solutions to eliminate these silos and create real-time, end-to-end monitoring.
“The rise of data has created a clear and urgent need for operators to introduce new ways of dealing with network traffic such as prioritisation of higher tier subscribers. End-to-end monitoring and analytics make that possible, but operators need to educate customers about the requirement for tiered traffic to ensure continued quality of service,” commented Lars Pederson, CEO, CommProve.
Operators implementing this new, unified approach to network monitoring - including Vodacom, part of Vodafone - reported reduced churn, increased levels of customer care and a renewed ability to differentiate and remodel their services around premium offerings.
The paper, sponsored by CommProve, a leading provider of network monitoring and business solutions for mobile networks, surveyed a number of mobile network operators. The research investigates operator strategies to tackle growing data needs and loss of revenue to OTT services.