Over half of operators (55 per cent) that responded to the Telecoms.com Intelligence Industry Survey 2014 believe shared data tariffs will be important in future pricing strategies.
Revenue and profit sources of mobile and fixed-line network providers are under much more pressure than originally thought. Users are radically changing their behaviour, over-the-top (OTT) offers are highly competitive, and, most of all, non-future proof toxic price models are in place.
LTE pricing is changing fast as the market matures. But while some operators are looking to employ elegant new charging models that draw on the sophistication LTE enables, others are still duking it out with least-cost options.
The most serious challenge mobile operators face over the next five years is the competitive threat from OTT players, according to overall respondents to the Telecoms.com Intelligence Industry Survey 2014. Almost 50 per cent of respondents rating the OTT threat a six or seven on a one-to-seven scale of severity. But the operator repondents themselves when broken out, however, judged regulatory pressure on pricing to be the biggest threat, with almost 60 per cent of operator respondents giving this a high rating for severity.
The GSMA has issued a fresh call for policy overhaul in the European mobile sector in a bid to bring the region up to speed with the world’s leading markets. Spectrum harmonisation, the removal of barriers to consolidation and freedom from close regulator control on pricing are essential to the sector’s improvement, the group said.
Mobile operator O2, the UK arm of Spanish group Telefonica, has announced pricing details for its LTE services, which are due to be launched later this month. The operator’s prices undercut those of rival EE’s, which launched LTE services late October 2012. However, the data usage limits quoted in the price plans are lower than its rival.
US operator T-Mobile has revamped its retail offering, abolishing handset subsidies for premium devices in favour of an interest-free scheme that separates the cost of the device from the cost of network service. Annual service contracts have also been withdrawn. The pricing overhaul is expected to be one of a number of announcements made by T-Mobile at a press event later on Tuesday, although the changes have already been made on the operator’s online retail portal.
UK operator Vodafone has hit back at regulator Ofcom’s suggestion that UK telecoms operators should not be allowed to raise consumer tariffs mid-way through fixed term contracts. Vodafone said that mobile operators are sometimes forced to adjust their prices to reflect changes in charges set by other operators for services such as premium rate or directory enquiries.
UK regulator Ofcom has launched a consultation into methods of protecting consumers from mid-contract price increases for fixed, broadband and mobile services. The consultation comes on the heels of a review in which Ofcom studied more than 1,600 consumer complaints in a six-month period about changes in tariffs for what consumers believed were fixed-price contracts.
An SMS sent out to O2UK subscribers this week indicates that the cost of making and receiving calls outside of the EU is set to rise dramatically. In some cases international call charges to the firm’s end users will more than double by the end of November.
Nokia’s high end smartphones are “too expensive” according to the European general manager for devices at international carrier Telefónica. Simon Lee-Smith told Telecoms.com that Nokia’s premium devices are “not yet at the right price point,” adding: “If Nokia wants to sell in volume, they need to bring out devices which are cost-competitive.”
Fixed broadband services in emerging markets are more expensive than in mature markets, keeping them beyond the reach of the majority of consumers, according to research house Ovum. The firm studied broadband prices across 19 emerging markets, including South Africa, Nigeria and Colombia, concluding that growth in fixed broadband is being seriously impeded by the high service cost.
The head of Australian ISP Internode has criticised the NBN Co. for its pricing model. Internode chief executive Simon Hackett said in a blog post that despite government promises that Australian consumers would pay similar prices for access to the fibre-optic based NBN as they do for xDSL, in practice it would cost considerably more.
Operators should end all-you-can-eat pricing models for LTE, analysts advised on Thursday. The LTE Tariff Comparisons report, from Ovum telco strategy analyst Nicole McCormick, notes that South Korean operators SK Telecom and LG U+, the largest and smallest players in their respective market, have launched LTE services with capped data plans rather than the previously favoured unlimited data.
UK-based carrier Vodafone has unveiled a cross border roaming initiative that it says will bring simpler and lower pricing for smartphone and mobile data usage for customers travelling within Europe. Amid regulatory pressure to reduce the retail cost of mobile data usage while abroad, Vodafone said its new, simple and transparent pricing provides daily and monthly rates for customers to use their domestic handset data plans overseas.