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New Thinking on Cellular Pricing Could Boost Revenue for Telecoms

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February 12, 2013

New Thinking on Cellular Pricing Could Boost Revenue for Telecoms

By Jacqueline Lee, Contributing Writer

Big telecoms have been experimenting with new pricing structures over the past year.

For instance, Verizon’s Share Everything plans, released last year, charge different access fees for different devices and then charge for data based on usage while offering unlimited voice and texting.

In December, T-Mobile (News - Alert) announced its Value plan, which eliminates subsidized smartphone pricing. Users pay full price for a smartphone plus $45 per month for 500 voice minutes, two GB of data and pay-per-text.

If customers can’t foot the full $650 for the new smartphone, they can pay $250 up-front and $65 per month for two years. They can also receive unlimited data for $10 extra per month.

Verizon’s (News - Alert) plan capitalizes on data, while T-Mobile’s plan delivers significant cost savings for customers. However, according to findings from Tekelec and Signals Research Group, neither one is offering the pricing that customers really want.

Signals has released “Mobile Broadband Pricing and Bundling—The Voice of the Customer,” which details findings based on a survey of five different countries: Brazil, India, South Korea, the U.K. and the U.S.

The major take away from this report is that customers may be willing to pay more for personalized services. The survey found that customers value price plans based on usage and specific applications more than they value device bundling plans or free access with advertising.

Carriers can potentially monetize specific services like e-mail, social networking, streaming video, remote lock and remote wipe, Web browsing, multi-user gaming, VoIP and cloud offerings instead of just offering a flat rate for usage.

In every country surveyed, customers wanted to bundle two to four services. E-mail, Web browsing and security features were the top three global choices for value-added services.

Customers don’t conceptualize their cellular service based on gigabytes of data. Instead, they think in terms of their mobile device’s functionality.

Telecoms are upgrading networks to handle demand for data, and they’re going to have to find a way to pay for the improvements. If Signals Research Group is right, then they’ll have to rethink pricing—again.

Edited by Brooke Neuman

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