The first myth is that unlimited data packages are on the way out, and operators are either moving away from marketing mobile broadband services as unlimited, or dropping unlimited data altogether. However the reality is the opposite and operators are actually embracing unlimited data services whole heartedly. The all-you-can-eat data buffet is close; as usage grows, networks will redefine the term “unlimited” and introduce new tariffs for the heaviest users. That doesn’t necessarily mean there is no fair usage policy at all, but that is how the operators are positioning it in the market. Interestingly more than 80{e1f18614b95d3cd6e4b3128e1cd15d99b042a60a5a19c19b7a8e07e7495efa10} of the cases of services marketed as “unlimited”, operators either apply bandwidth reduction beyond a defined usage cap or impose excess usage charges. Far from being dead, the practice of marketing mobile broadband services as “unlimited” is on the increase in World. More operators, instead of backing away from the concept, are actually moving toward unlimited data plans, and featuring them more frequently in their portfolios. In the third quarter of 2009, there were about 20 operators marketing unlimited propositions in the world. By the first half year of 2010, the number of operators in that sector had increased by about a third. The Swedish market is particularly interesting example. About a year ago, the top three operators decided to move away from “unlimited” marketing and turned to tiered data pricing for mobile broadband. That should have been the end of unlimited data in Sweden. Furthermore, this move as a demonstration of best practice for operators was referred in other markets as well. Nevertheless a unique methodology based Swedish operator dug in its heels and made a selling point of “unlimited”, effectively, forcing its competitors to return, most reluctantly, to unlimited data marketing within a year.
The second myth was that the market had stabilized, and that the price war danger that was first identified in 2008 had been neutralized. Additionally, with the market maturing, people believe the concept of super aggressive pricing has disappeared, and postpaid pricing is at a very stable level. In fact, this is not the case. In the second quarter of 2010 across the world, most radical price dip in postpaid entry-level plans was experienced, which was not expected. This was triggered by promotions happening in the prepaid market, but also cutthroat pricing policies pushed through operators’ secondary brands, targeting the value segment with distinct marketing and branding strategies. The secondary brand effectively allows operators to play aggressively in the market while protecting their core, “quality” flagship brand. If we only consider pricing within the primary channel, pricing does indeed appear to be relatively stable. But if we look across the continent at the aggregate operator channel, there is still a lot of downward pressure. The biggest trend in mobile broadband is a new, “no-contract” proposition, also referred to as a 30-day rolling contract. A 30-day contract is defined as a hybrid postpaid/prepaid model, through which users commit to a monthly spend, but may churn within a two-week notice period. Interestingly, penetration of the 30-day contract has grown significantly throughout World primarily due to the iPad and other tablets. The markets and products with this proposition were up from 2 and 5 in the last quarter of 2009, to 8 and 44 in the second quarter of 2010 respectively. In the third quartet of 2010, just over half of all 30-day contract plans in World were aligned specifically with iPad or tablet offers. This, without doubt, is the fastest growing proposition in mobile broadband today, with grave implications for retention and loyalty in this segment.
The third myth is that die market is so mature, and that marketing has come so far that we are ready for LTE and for differentiated experiences, treating users as individual with different applications and different priority requirements. In short, the belief is that we are ready for QoS. In fact, this is not true.In World, most operators pose a blanket ban on undesirable applications, such as P2P, VoIP, IM and other applications related to peak-time usage, this ban seen as passive and rather toothless. It is written into the service’s terms and conditions, but represents little more than a fair usage warning for users.
Mobile broadband marketing has barely evolved over the last year. World operators are failing to provide small businesses with a differentiated proposition. This is a chronically under-provisioned market. Around 90{e1f18614b95d3cd6e4b3128e1cd15d99b042a60a5a19c19b7a8e07e7495efa10} of mobile broadband portfolios for small businesses ate little more than consumer portfolio duplicates, with near or identical positioning and marketing messages. Small businesses are, in fact, groups of users, yet just 10{e1f18614b95d3cd6e4b3128e1cd15d99b042a60a5a19c19b7a8e07e7495efa10} of World operators offer group tariffs, or bucket plans, for small businesses. Traditionally, mobile operators have always hyped the network, with coverage, speed and quality as the key marketing messages, using these assets to establish a unique selling point. Mobile broadband service marketing, to date, has tended towards network centricity. It’s all about the network, and what the network can do for you. We need to move towards customer-centric marketing message focusing on what the user want from our network; positioning which recognizes the distinct application requirements of different user segments. At Current Analysis, it is recommended that operators make the move away from network-centric to customer-centric marketing. From single-Speed marketing shouts to differentiated speeds, from hard ceilings, unlimited usage and fair usage polity in differentiated priorities according to time of day; and from the network as a key differentiator to differentiated application usage profiles and real-time notification. Moreover, usage of unlimited data marketing judiciously and seeking leadership in the small business market is the call of the time.
