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Mobile Broadband: In Search of a Better Bundle

Written by Brian Walsh, Cisco

In a previous blog, I discussed ways in which mobile operators can offer win-win subscriber services that let users access the abundance of mobile internet applications while addressing the operator threat from services substitution and revenue-less traffic growth. One approach in mobile broadband is “the bundle” – mobile data service plans that provide a combination of on-deck and internet-based services. Fixed broadband providers have long offered “Triple Play” bundles of voice, video, and data. Some have added in mobile services for the so-called “Quad Play” (thus turning the original baseball analogy into a mixed metaphor!). But how effective has the bundle been for mobile operators?


The Basics: Many operators are offering “flat rate” mobile broadband plans, typically in tiered levels of maximum monthly fair usage policy (FUP). Plans from operators such as AT&T, T-Mobile, 3 Sweden, Network Norway, and others offer “Light/Medium/Heavy” usage packages at different price points based on the size of FUP allowances. Pricing further varies by the length of the contract and whether the subscriber connects to the 3G network with a smartphone or a dongle-connected laptop or netbook. These bundles give subscribers a “pay for what you need” option at the data usage level.


Once monthly quotas are reached, operators are employing a range of ways to notify subscribers and/or restrict services while maintaining subscriber satisfaction (and retention!). The risk of a billing surprise can still be great, especially for 3G dongle users who consume bandwidth with “fixed line behavior”. Often users do not even have an understanding of their monthly GB limits or the extent of the financial risks they incur!


The WiFi Extra: Several operators are giving users something “extra” on top of mobile broadband by bundling Wi-Fi access. Operators are partnering with hotspot providers and/or leveraging their own Wi-Fi networks to gain competitive differentiation and provide additional value for their customers. For example, AT&T offers iPhone and BlackBerry users free Wi-Fi at certain public venues. According to AT&T, nearly 15 million users connected to their public wireless hotspots in Q2 2009, a 41% increase from the previous quarter. T-Mobile smartphone users can use Wi-Fi at T-Mobile hotspots as part of the company's [email protected] service. This type of bundle gives users greater connectivity options while also offloading traffic (and costs) from operators’ 3G networks, benefiting all network subscribers.


The Fixed-Mobile Bonus: Not surprisingly, operators with both mobile and fixed broadband networks are offering this logical bundle extension to the mobile broadband bundle. For example, Verizon is giving its FiOS customers free Wi-Fi access at more than 100,000 hotspots around the world. BT’s Total Broadband gives customers Internet access over its 3G network per FUP-based tiers with unlimited usage when accessing the Internet over BT’s Wi-Fi hotspots.


The Personal Touch: a Bundle for Me! All of these bundles are attempts by operators to simplify their offers, create additional value for subscribers, and cross promote services – in the quest to drive higher customer adoption and retention. But these early approaches are still primitive, where the focus of the bundle is largely at the network access level. The real promise of Mobile Internet monetization will be reached by operators that can offer subscribers the ability to flexibly choose and pay for applications and services that they want. Operators will increase customer “stickiness” with user-controlled personalization and can drive higher ARPUs from the deeper market segmentation enabled by subscriber personalization. A positive step in this direction comes from operators who have begun to offer what might be called “personalized paks” that target certain subscriber demographics. 3 Australia, for example, offers a wide range of mobile broadband packages grouped into themes such as entertainment, news, sports, social networking, etc. The packages contain both on-deck content and services as well as access to favorite 3rd party internet applications. While risking some confusion over the range of bundles, the demographic and theme-oriented services bundles make it easier for subscribers to select a mobile broadband plan that appeals to their interests (and the capabilities of their mobile phone). Just got a new video-friendly device and don’t want to ever miss the latest cricket highlights? Subscribe to the Mobile Internet Sports pak!


Operators are beginning to deploy dynamic IP network intelligence capabilities that give them the subscriber, session, and application-aware intelligence needed to offer subscribers the ability to personalize their service subscriptions and usage. Even more importantly for operators’ revenues, these capabilities will give their marketing organizations the business flexibility to cross-market add-on services, loyalty programs, customized advertising, promotions, bi-directional partnerships with 3rd party content providers, and more.


Have you seen other mobile internet services that include innovative user personalization?

More Stories By Deborah Strickland

The articles presented here are blog posts from members of our Service Provider Mobility community. Deborah Strickland is a Web and Social Media Program Manager at Cisco. Follow us on Twitter @CiscoSPMobility.