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Friday, February 22, 2013

Mobile Internet Advances Where the Price is Attractive

What can the rest of the developed world learn from mobile network service providers in the emerging markets? Do the savvy marketers in these emerging nations have a better understanding of effective market development strategy?

​India currently offers the lowest priced mobile services plan that includes internet access, according to the latest global market study by ABI Research.

"India’s lowest priced mobile data plans decreased 29.4 percent year-on-year (YoY) compared to Q4-2011, when it ranked fourth," said Marina Lu, research associate at ABI Research.

According to the findings from ABI's survey, in stark contrast to India, UAE currently has the most expensive mobile internet pricing plan at $67.8 for 5GB.

There is considerable fluidity in mobile data tariffs -- just one year ago, Singapore had the least expensive mobile internet tariffs, but it has since reduced its data caps while keeping the tariff pricing the same.

Comparing mobile internet pricing between Q2-2012 and Q4-2012, 73 percent of countries have reduced the effective cost of their 4G tariffs to a significant degree. The effective cost -- i.e. the "Dollar per Gigabyte basis" -- has dropped by 30 percent.

However, in the U.S. market, where there's surprisingly little price competition, most of the carriers took the route of keeping fees the same but have introduced larger data quotas.

In Australia, Sweden, Japan, and Saudi Arabia the operators lowered the monthly fee but have kept data quotas unchanged.

In Norway, Telenor has introduced 4G tariffs that are cheaper than 3G services.

4G is more spectrally efficient and can handle a lot of data, but ABI believes that it's also important for mobile network service providers take advantage of 4G to boost service revenues.

One way this can be done is through multi-device plans. As an example, Verizon's "Share Everything" plans have helped to contribute to a net increase of 2.2 million subscribers in Q4-2012 and boost their in part service revenues by 8.52 percent to $16,393 million.

But, I'm left wondering how many new mobile internet subscribers could be gained if Verizon's basic service pricing were more affordable?

Case in point: I'm a Verizon Wireless customer and I've consistently avoided their smartphone offerings, because the price threshold to convert doesn't seem to be worth the incremental cost to me. Ask yourself, what can be learned from this example scenario?