Mobile data pricing

  • September 2013
  • -
  • IDATE
  • -
  • 89 pages

Description:

This report provides a detailed analysis of telcos' mobile data pricing strategies, with particular focus on 4G. It also examines operators' strategies with respect to devices and for services bundled with access. It explores the issues at hand, along with a number of innovative approaches, and provides an operator benchmark for Europe, the United States and Asia. A data book included in the report supplies readers with detailed market data, and a succinct summary of our pricing analysis.

Region:

Austria,France,Germany,Italy,South Korea,Spain,Sweden,United Kingdom,USA

This report includes:

- a complete market report
- a PowerPoint slideshow

Table Of Contents

Table of contents

1. Executive summary 9
1.1. Main findings 9
1.2. Pricing strategies for mobile data services: tiered pricing becoming the norm worldwide 11
1.2.1. Device-related strategies: data sharing and separating the service from the device 13
1.3. Upmarket services strategy: multipronged for multiple goals 15
1.3.1. Prices all over the map 16

2. Pricing a key ingredient in any 4G strategy 17
2.1. Status of superfast mobile 17
2.2. Marketing strategy vital to the success of 4G 20
2.3. Users need clearer pricing 20
2.4. Report outline 21

3. Mobile data pricing strategies 22
3.1. Line strategies 22
3.1.1. What is at stake 22
3.1.2. Pricing parameters 22
3.1.3. Volume and speed: central parameters for a product line 23
3.1.4. Operator benchmark 23
3.1.5. Summary: overall shift to tiered pricing 25
3.2. Superfast mobile pricing strategies 27
3.2.1. Operator benchmark 27
3.2.2. Two core strategies for superfast mobile 28
3.3. Innovative mobile data pricing strategies 29
3.3.1. Volume-based tiered pricing strategies 29
3.3.2. Strategies that combine tiered volume and speed 30
3.3.3. Unlimited offers 31
3.3.4. Premium 4G strategies 34
3.3.5. 4G “must-have” strategies 37
3.3.6. Other innovative strategies 38

4. Device strategies: unbundling device and services? 42
4.1. Are device subsidies dead? 42
4.1.1. What is at stake 42
4.1.2. Operator benchmark: subsidies and alternative strategies 45
4.1.3. Summary: subsidies decreasing, but still around 47
4.2. The shift to data sharing and dual SIM card plans 48
4.2.1. What is at stake 48
4.2.2. Overall benchmark 48
4.2.3. Summary 50
4.3. Innovative device strategies 50
4.3.1. Offers that separate the device from the services 50
4.3.2. Device replacement offers 54
4.3.3. Device leasing 55
4.3.4. Handset buyback offers 56
4.3.5. Plans built around the device 57
4.3.6. Working to increase tablet traffic on cellular networks 58
4.3.7. Family plans 60
4.3.8. Multiple device, multiple user data sharing plans 60
4.3.9. Other data sharing possibilities 61

5. Service strategies 63
5.1. What is at stake 63
5.2. Operator benchmark 63
5.3. Summary: multiple objectives 64
5.4. Innovative content strategies 66
5.4.1. LG U+: stand out from the competition with value-added services 66
5.4.2. Verizon: switching from a proprietary video platform to third-party services 67
5.4.3. TIM’s multi-device content strategy 68
5.4.4. TeliaSonera audiobooks 69
5.4.5. H3G’s film-centric plan 69
5.5. Plans to better compete with OTT 69
5.5.1. Verizon’s paid cloud solutions 69
5.5.2. RCS: Rich Communication Services 70
5.5.3. H3G UK: application-centric strategy 71
5.5.4. Orange’s social networking offer 71
5.6. Plans to stand out from the competition 72
5.6.1. A1: navigation options 72
5.6.2. Mobile payment by TeliaSonera Sweden 72
5.6.3. Orange France: differentiation through upmarket services 72
5.7. Plans aimed at increasing ARPU 74
5.7.1. ATandT’s insurance services 74
5.7.2. NTT DOCOMO’s multi-platform service strategy 74

6. Pricing analysis 75
6.1. Data allowances 75
6.1.1. Close to 2 Gb of data traffic a month on laptops in advanced countries 76
6.2. Price 77
6.2.1. Subscription prices 77
6.2.2. Price elasticity according to data allowance 78
6.2.3. Price per Gb 81

7. Data book 82
7.1. Austria 82
7.2. France 83
7.3. Germany 83
7.4. Italy 84
7.5. South Korea 85
7.6. Spain 85
7.7. Sweden 86
7.8. United Kingdom 87
7.9. USA 88



Tables

Table 1: SWOT analysis of key strategies for mobile data plans 12
Table 2: SWOT analysis of key device-related strategies 14
Table 3: SWOT analysis of key upmarket service strategies 15
Table 4: Status of LTE at the end of 2012 17
Table 5: Recap of mobile telephony technologies 19
Table 6: How users perceive mobile data pricing schemes 20
Table 7: Parameters used to price mobile data services 22
Table 8: Postpaid mobile data plans associated with a smartphone 23
Table 9: Superfast mobile line strategies (for postpaid smartphones) 27
Table 10: T-Mobile DE line for smartphones 30
Table 11: T-Mobile DE line for tablets 31
Table 12: Sprint’s mobile service plans 31
Table 13: Pricing for Swisscom’s Natel Infinity range 33
Table 14: Comparison of Orange/EE SIM-only postpaid plans (12-month contract) 34
Table 15: A1 range for smartphones 35
Table 16: Orange France’s Origami Play line 36
Table 17 Vodafone Germany’s fixed line replacement plans 38
Table 18: Vodafone DE line for smartphones 39
Table 19: Vodafone DE data only plans 39
Table 20: Pricing of T-Mobile UK plans with 1 Gb of data 40
Table 21: H3G SIM-only plan pricing 40
Table 22: Average handset prices worldwide, excluding subsidies 43
Table 23: Regulatory initiatives 44
Table 24: Benchmark of operators’ device strategies for postpaid mobile data plans associated with a smartphone 45
Table 25: Operators’ device-related initiatives 47
Table 26: Group and multi-device mobile data plans (postpaid associated with a smartphone) 49
Table 27: Growth of mobile subscriber numbers in Spain 52
Table 28: TDC handset sales: financial data 53
Table 29: Comparison of subsidised iPhone 5 offers in France 53
Table 30: Vodafone UK’s device leasing offer 55
Table 31: SFR’s RED and CARRÉES plans 57
Table 32: SFR’s postpaid plans 59
Table 33: Verizon’s "Share everything" price tiers by data allowance 60
Table 34: Cost per device in a data sharing plan 61
Table 35: TeliaSonera’s product range 61
Table 36: H3G UK’s MiFi plans 62
Table 37: Upmarket services sold by mobile operators 63
Table 38: Upmarket service strategies by goal 65
Table 39: LG U+ LTE smartphone plans 66
Table 40: LG U+ subscriber numbers, ARPU and market share 67
Table 41: TIM’s content offerings 68
Table 42: Orange Origami line (postpaid flat rate, SIM-only, 12-month contract) 73
Table 43: Breakdown of supplementary revenue streams (billion YEN/€) 74
Table 44: Average monthly consumption by type of device 76



Figures

Figure 1: Mobile data pricing strategies 10
Figure 2: Price per Gb (min/max) for plans with no handset subsidy, and including unlimited calling and SMS, in July 2013 16
Figure 3: Number of LTE subscribers for a selection of operators, at the end of 2012 19
Figure 4: LTE market share in the United States, by number of subscribers 26
Figure 5: Telcos’ product line strategies for mobile data services 26
Figure 6: 4G product line strategy, depending on coverage rate 28
Figure 7: Verizon’s 4G upgrade offer 29
Figure 8: E-Plus BASE line in Germany 30
Figure 9: Sprint’s unlimited plan 31
Figure 10: T-Mobile USA plan 32
Figure 11: Swisscom’s NATEL range 33
Figure 12: How Infinity plans affect ARPU 34
Figure 13: Telekom Austria’s A1 plans 36
Figure 14: TIM’s 4G plan 36
Figure 15: Orange France superfast network option 37
Figure 16: M1 plans 37
Figure 17: Telenor’s entry-level 4G plan in Sweden 38
Figure 18: Vodafone Germany’s calling and internet access plan 39
Figure 19: NTT DOCOMO’s "Xi Pake-hodai double" plan: flat rate + usage 41
Figure 20: Breakdown of NTT DOCOMO’s Xi plans 41
Figure 21: Market share by type of smartphone in the UK, Q1 2013 43
Figure 22: Change in the average retail price of a handset 43
Figure 23: Monthly wireless ARPU and ARPC 50
Figure 24: O2 Refresh plan: separating the phone from the airtime 51
Figure 25: T-Mobile’s separate phone sales 51
Figure 26: Vodafone’s no-fee instalment plan for handsets 52
Figure 27: TDC’s monthly instalment plan for handsets 52
Figure 28: Free’s handset subsidy offer 53
Figure 29: Vodafone’s postpaid rate plan for an iPhone 5 54
Figure 30: T-Mobile’s Jump! handset upgrade offer 55
Figure 31: Vodafone UK’s device leasing offer 55
Figure 32: O2’s device leasing offer 56
Figure 33: Vodafone UK’s buyback offer 56
Figure 34: O2 UK’s buyback offer 56
Figure 35: SFR’s device-centric strategies 57
Figure 36: TIM’s range of plans 58
Figure 37: SFR’s MultiSurf dual SIM card option 59
Figure 38: Verizon’s data sharing plan 61
Figure 39: How a mobile hotspot works 62
Figure 40: Value-added service strategies by goal 65
Figure 41: LG U+ gaming and HDTV services 67
Figure 42: Navi U+ from LG U+ 67
Figure 43: Verizon’s Viewdini platform 68
Figure 44: TIM’s Cubolibri plan 68
Figure 45: Joyn screen grab 70
Figure 46: H3G UK’s app portal 71
Figure 47: The Orange France FamilyWall offer 71
Figure 48: A1’s navigation service for drivers 72
Figure 49: TeliaSonera’s premium service line 72
Figure 50: Orange’s Origami line 73
Figure 51: ATandT’s Mobile protection pack 74
Figure 52: NTT DOCOMO’s high-end services 74
Figure 53: Data allowances for postpaid smartphone plans (mini-maxi) 76
Figure 54: Price range for postpaid, SIM-only smartphone plans, not including subsidies 77
Figure 55: Price elasticity according to data volume 78
Figure 56: Verizon’s per-Gb price, according to data sharing plan allowances 79
Figure 57: EE’s per-Gb price, according to data allowance 79
Figure 58: Price elasticity of data-only plans 80
Figure 59: Price per Gb for plans with no handset subsidy, and including unlimited calling and SMS 81

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