Technology | Media | Telecommunications

Friday, September 12, 2014

Expect to Pay More for Your Mobile Internet Access

As the Mobile Internet becomes a greater part of most people's daily online lives, telecom regulators are monitoring service provider attempts to increase revenue by manipulating data service plan pricing.

Why would mobile network operators risk creating the environment for additional regulatory oversight? They're following the usage trends of the experienced smartphone subscriber, and they know the future mobile data traffic predictions.

The aggressive deployment of LTE networks has encouraged higher data consumption, providing an opportunity for mobile operators to focus on introducing mobile plans with a higher data quota.

According to the latest market study by ABI Research, countries that have a monthly data quota in the range of 8 to 10 GB have increased from 21 percent in 1Q 2014 to 83 percent of the total in 2Q 2014.

Facing a downward trend in ARPU, mobile network operators are in search of solutions to boost their profitability. The introduction of multi-tier, multi-device shared plans allow mobile operators to target different customer segments more effectively, and in some cases, increase the price.

What's prompted this latest move. Savvy mobile subscribers have discovered they can use over-the-top messaging applications, such as the WhatsApp Messenger, and thereby reduce or remove the service provider fees they've previously paid for text messaging.

"This shift in monthly data quota provides an opportunity for mobile operators to actually revise their pricing strategy," said Lian Jye Su, research associate at ABI Research.

This change is being reflected in an average increase of 11.31 percent in the monthly tariff in the top 20 markets. In Canada, all three major mobile operators increased their price by $4.50 -- despite offering an identical data quota (limit) before the price hike.

On the other hand, 'unlimited' data plans are slowly disappearing, dropping from 50 percent in 1Q 2014 to 27.6 percent in 2Q 2014. Instead of affordable single-device data plans, major mobile operators in the United States, Canada, Hong Kong, and Australia are offering multi-device data sharing plans.

For example, U.S. Cellular focuses its pricing strategy solely around data sharing plans and has increased its prices significantly.

ABI believes that a shift toward shared data plans signals the mobile operator's marketing strategy to tap into increased data consumption. Personal mobile plans have reached market saturation and service providers are keen to search for other growth segments in the market.

Mobile network operators are also introducing new 'customizable' personal plans. In Singapore, SingTel launched Asia's first post-paid mobile service that allows complete customization of voice, messaging, and data services. On the other hand, Virgin Mobile introduced a customizable prepaid plan with Walmart in the United States.