Telcos urged to innovate data tariffs to counter OTT threat

At LTE North America in Dallas this week, a panel featuring Wireless 2020, IBM, Allot Communications and US-based MVNO FreedomPop urged the service provider community to develop more flexible and tailored data bundles for customers.

During a discussion focused on future revenue generation opportunities, conversation moved towards the current landscape which is seeing telcos lose ground to over the top content providers. Ken Jackson from IBM Now Factory believes that moving to specific and tailored, content-based services is a feasible opportunity for operators to monetise services in new ways.

“Let’s look at the example of a service called NFL Now, a friend of mine can watch as much NFL as he wants, and doesn’t pay for the data he uses, he pays to watch football,” he said. “We have to return the value proposition to the customer, find out what it is they want to do, and offer it to them. Make everything customer centric, and orchestrate your business around what they need”

Haig Sarkissian from Wireless 2020 concurred with Jackson, and urged the service provider community to move away from basic all-you-can-eat data plans.

“5% of the heaviest users consume 40-50% of the network, and they pay the same as the majority,” he said. “That’s why unlimited data plans are unfair, because the majority are subsidising the data usage of the minority. Operators find that this is no longer scalable because if you eat more you have to invest more into capacity. I don’t see it changing any time in the future, unless there’s a fair way of using these “dumb pipe” plans. Is there hope for SP differentiation outside of these unlimited data plans?”

Allot Communications’ John Priest said service delivery is becoming far more personalised and tailored than in the past, suggesting operators should have a think about how they allow users to access the information and the content they want.

“I think we need things like VAS for the customer to make them feel in control of what they need. It’s not just the volume, it’s about the content they want and delivering that to them. Users want to know what they’re consuming, so the SP has to know what they’re consuming and how they’re consuming it, so that you can be more proactive in the customer care and guarantee a higher quality of service.”

“But here are a couple of examples of opportunities for SPs to generate revenue aside from traditional voice and data pricing models. Sponsored data solutions, for example, sees the user get free data if they’re going to certain sites, which is a partnership between the SP and the content provider. Similarly to music streaming services, SPs can strike up a partnership with advertisers.”

US MVNO FreedomPop’s Mauricio Sastre suggested there are opportunities for partnerships between carriers, app developers and content providers, help users consume new applications for reduced costs, or for free.

“In an effort to get their app out there, the app developers are considering paying for the data that their app consumes, so there can be a subsidised way for users to consume their application.”

Of course, when debating content services over service provider networks, we naturally reach the inevitable pain point of net neutrality, Wireless 2020’s Sarkissian rounded of the discussion on such a note.

“When do we get into the net neutrality debate, the big elephant in the room? Do you decide to charge more for content from Netflix, or NFL Now, or WebRTC services?” he said. “In my opinion, any resource that’s finite, and has the potential to be fully consumed, should be left alone from regulation. Otherwise you jeopardise the investment into, and the competition of, all of these services.”