KPN joins flat rate data revolt

Dutch carrier KPN is the latest operator to join the revolt against flat rate data charges and is likely to introduce usage-based tariffs by the end of the year.

Following the publication of the carrier’s first half financial results last week, chief executive Ad Scheepbouwer, said that data would eventually overtake voice in terms of importance and heavy users of mobile data services would have to be charged for their usage.

Calling the introduction of tiered pricing a return to sanity, Scheepbouwer said that KPN had experienced a strong increase in data users on its Dutch and German networks to the point where “mobile data is becoming a mass market service”. As a result the uptake of smartphones and applications have resulted in an exponential growth in data and signalling traffic with continued investments in capacity required as well as further improvements in active traffic controls to effectively manage the network.

“Data pricing needs to be more closely linked to the cost of delivering the service in order for KPN to be able to monetize the data growth opportunity. KPN has therefore already started to actively inform customers on data pricing and will further implement pricing differentiation,” Scheepbouwer said.

With this announcement, KPN follows AT&T, O2 and Vodafone in addressing what some are calling the elephant in the room with operators introducing new business models to address the growing capacity crunch and ensure a return on investment for current and next generation networks.

“In many developed markets, flat plans have become the rule for data-hungry devices such as the iPhone, creating no incentive for users to monitor their behaviour. With operators considering investments in next generation networks such as LTE, it is important to get billing models right now,” said Mike Manzo, CMO of Openet. “Creating tailored services and differentiated plans could help consumers save on their bills and motivate them to adapt their use, optimising the way the network is utilised.  Network operators need to put parameters in place so that all consumers receive the network performance guaranteed in their contracts. But for that to happen, they need to re-evaluate their pricing strategy,” he added.