My Picks for the Most Innovative Data Plans of 2013

December 18, 2013 by Nigel Back

The mobile landscape has genuinely transformed during 2013. Rapid LTE deployment is seeing mobile data truly coming of age. Navel-gazing around how mobile Internet will change the world is giving way to real and exciting service and pricing experimentation.

As the industry shifts into a higher gear, some of the first generation tariff models are diminishing in the rear-view mirror. The stick of fair-usage throttling and bill-shock blocking layered onto all you can eat plans is yielding to a more innovative and value-driven tariffing carrot more attuned to customers’ immediate context, communities and activities.

So we end 2013 with our Mobile Data Pricing Oscars, naturally in the traditional reverse order:

At number seven, ‘time based offers’ being offered by operators such as Rogers, Vodafone, O2 and DTAC. They are designed to encourage customers to try data for a fixed price for a day or week. By offering the certainty of the fixed price, Bill Shock is prevented, but in a positive way.

At number six, ‘speed boosts’ allow customers to enjoy the speed of a premium package for the price of the ‘lite’ offering, but for a limited time. Speed is clearly sexy but as other commentators are pointing out, a great video streaming experience needs more from a network than raw throughput. Quality of Experience can be seriously degraded by statistical demons such as packet delay variation and loss. And simply pushing out higher speed access connectivity across a large customer base is likely to stir these demons.

At number five, ‘Quality of Service (QoS).’ Already being offered to the corporate market by operators such as Vodafone, this is a much discussed service and a genuine innovation in the corporate space. Whether simple QoS will make it to the consumer space soon is another question, perhaps it needs to be more tightly coupled to the applications being used than a blanket QoS offering.

At number four, ‘shared data plans.’ Giving is good, as evidenced by a rapid growth in the launch of data sharing plans across virtually all major markets. They are also an important stepping stone to further innovation and value creation. The ability to manage multiple devices, balances and services means more control for the customer and greater adoption of self-service. Sharing plans also recognize the value and stickiness in serving a community of users, be it a family or some ad-hoc group created around a particular short-lived event. Whether - and when - sharing will emerge fully in the corporate world will be something to watch for.

At number three are ‘revenue sharing’ plans. This is possibly the most refreshing development in 2013. It shows how value can be created and shared through innovative partnering, negating the view that OTT players are simply competition. Recent announcements such as Amazon partnering with Telecom Italia and Spotify with Deutsche Telekom will be welcome news to marketers. While these OTT players will have their apps on every new device, with the obvious benefits to both parties, there are other developments in the corporate world. Companies such as Microsoft offer their applications via the cloud, in partnership with particular operators – a combination of a QoS and partnership offering.

As we come to our top two, we stray a little from the topic of mobile data, but the relevance remains clear. Both come from the retail industry where razor thin margins, intense and aggressive competition and a well-informed customer base more than ready to jump ship should sound only too familiar!

So, at number two, we have ‘tariff optimization.’ In the UK, supermarket giant Sainsbury offers customers a voucher at the checkout for the price difference if the same basket of goods is cheaper at a competitor. This will, generally, be a small amount and many customers will not bother to redeem the voucher. It is, however, a good example of near real-time analytics being used to prove that you are the customer’s champion. It is also, in the communications world, the elephant in the room, as operators do not necessarily embrace clarity in pricing!

And (fanfare) at number one, there’s ‘dynamic pricing.’ Retail chain B&Q has launched a service where customers can point their mobile device at tags on the shelves. If you are a loyal, profitable customer you will immediately be offered a discount, special offers and loyalty deals. The occasional low-spending customer next to you might be offered full price and no deals for the same item; or incentives to become a loyal customer, now that they know the benefits! A great example of customer data not decaying in a warehouse but being leveraged in real-time at the heart of every transaction.

It would be excellent to imagine that the top two pricing innovations at the end of next year could be linked with names in the communications industry. With the speed of innovation increasing rapidly, who knows?