Speed sells, but speed sells stuff too – the real potential of LTE

When things are getting interesting and moving as fast as they are in the communications world, it is easy to get ahead of yourself. Sometimes you seem to go round in circles. It is advisable, if this happens, not to meet yourself coming the other way. Events such as TM Forum Live tend to set you off into the realms of enchantment where ‘data’ is a term we used in the ‘old days,’ products are clear and simple and the innovations pouring out of operators’ marketing factories leave us bewildered by their sheer invention.

But invention is happening, and actually quite fast.

We are definitely still at the stage of selling ‘data’ but we are beginning to make this cloudy concept clearer. We are selling speed, because speed delivers value to make certain bandwidth hungry applications work properly. And we are selling Voice 2.o in order to fight back against OTT voice players.

Confusion is easy to catch amongst the wealth of services now being offered by operators around the world, which is why papers such as this one from Openet are as useful as they are. A simple ‘Top Ten’ LTE services from operators around the world, it takes us on a concise but interesting journey from speed, through shared plans to sponsored data and beyond.

It is interesting to compare what operators in different regions are doing, both within their own region and beyond. Examples of speed as a selling point are common in Europe and several of the major operators are cited. The ‘best’ example is from Swisscom who are offering different ‘layers’ of speed, where, at the pinnacle lies ‘unlimited’ and ‘high speed’ internet like service. Which is fine in itself but clever too. Because most of their customers are using lower speed services, a glimpse of high speed, unlimited service, even a trial, entices them to try it and finally, when they have to go back to the lower tiers and simply cannot face how slow it now seems, they succumb and buy the best.

You can sell speed in different ways of course. Once you have customers who have run up to their data limits – a reasonably common occurrence as we know – you can offer to restore their speed and give them more data for a few days, thus selling them a service and solving a problem for the customer.

Roaming charges for data are being scrapped – thankfully – on 15 December 2015. Whilst operators will be amazed, with hindsight, how many of their customers simply turn their data off while travelling, some operators are already innovating with data roaming deals. T-Mobile USA, for example, are offering unlimited data while roaming, albeit at slower speeds than at home, and for a fixed – and therefore clear, bill shock free – fee.

Speed is enticing but operators are now beginning to look beyond it to see what it allows them to offer. Policy management and real time charging open up whole new opportunities. Several are described in Openet’s ‘Top Ten’ and it is clear that context type deals are beginning to appear. A customer on a slower speed data plan sets up a Netflix video – and the operator sends a message offering higher speed, and therefore better quality for the duration of the video. Win-win. A customer with no data plan tried to access Facebook, the operator can offer a simple, understandable data bundle for him to try.

The majority of operators will be launching Voice over LTE in the next two years. This demands guaranteed quality, and policy management and real time charging can manage this. What it also means, apart from offering customers ‘free’ high quality voice, is that expensive legacy networks and systems can be ‘recycled’ and therefore costs can be cut.

Shared data plans are also proving their worth, even relatively simple ones are dramatically improving the bottom line of major operators such as AT&T and Verizon. AT&T tripled the number of shared plans last year, increasing revenues and increasing the number of satisfied customers. Now you can even add your car to your AT&T plan.

Shared data is probably where it is ‘at’ at the moment in the innovation stakes. There are several flavours of these plans and they deserve a focus of their own. Sponsored data is gaining a lot of coverage in the press and makes sense for customers and operators alike, mainly because it removes uncertainty. Knowing that someone else is paying the data bill while you are having a guided tour of a shop or shopping mall makes the customer more likely to take the tour and the brand gets the attention of a possible customer.

‘Beyond’ sponsored data, some operators are now collaborating with OTT players and this trend will mature and become commonplace in the next two to three years. Offering access to applications such as Facebook and other content partners for free means the partner gets access to the operator’s customers and the operators gets a deal for his. Once hooked, customers trying out this free access can be migrated onto longer term offers.

Whether the offer is a simple speed or data one, or whether it is something more sophisticated, Openet found that the critical factor is to enable the purchase or acceptance of the deal on the device, as your customer thinks about it. 

This is a turning point for the communications industry, this acceptance that everything must be responsive in real time. It is not surprising that both Openet’s research, as well as other surveys are coming up with figures that point to the overwhelming majority of operators implementing real time charging and policy management systems in the next two years.

Speed sells – but remember that it sells a lot of things.

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Alex Leslie
About Alex Leslie 400 Articles
Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet.

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