SHARE



ABOUT THE AUTHOR


Ben Fox
Ben Fox is a Managing Director at TechCaliber Consulting (TC2) based in London, UK. Ben specializes in leading complex global...
Read Full Bio >>
SHARE



Ben Fox | January 22, 2013 |

 
   

Keeping Ahead of the Wireless Pricing Curve

Keeping Ahead of the Wireless Pricing Curve Staying at the forefront of wireless pricing trends requires revisiting contracts and pricing frequently, and keeping contracts as short and flexible as possible.

A growing trend in the consumer world is plans designed to support multiple devices for an individual or family, which provide unlimited voice and messaging usage across all devices and a data allowance that is shared across all of the individual's or family's devices, e.g., see AT&T's Mobile Share plans and Verizon Wireless' Share Everything Plans. Verizon Wireless is also launching similar plans for business users.

At the time of this writing, the details of these new Verizon Wireless business plans (particularly those targeted for enterprises rather than small businesses) have yet to be released, so the degree to which they differ from the data sharing plans that carriers are already offering is unclear. Traditionally, wireless plans have been linked to devices (notwithstanding pooling of voice and/or data usage; you buy individual service plans for each of your devices, with individual 12- or 24-month minimum service terms). So transitioning to a model that is more focused on users would be a big change. But it is also a change that has strong parallels with Unified Communications, where licensing and pricing models are already aligning with users, rather than devices, regardless of how many devices a user has. This will be fascinating to watch in 2013.

Will Equipment Subsidies change?
One longstanding "feature" of wireless services that presents a major challenge to de-coupling rate plans from devices are the large equipment subsidies that service providers give to offset the high cost of wireless devices, which lead the providers to require individual-line term commitments and early termination fees. The increased popularity of expensive smartphones has taken this aspect of wireless pricing to new extremes, despite the carriers' claim that they would prefer to do away with equipment subsidies.

T-Mobile is currently making a unique move in the consumer market by offering plans that do not provide equipment subsidies or require minimum contract periods. The other suppliers are watching to see how it turns out, and we expect changes in this area to be evolutionary, not revolutionary.

There is already one area, however, where suppliers are not offering equipment subsidies--tablets, particularly iPads. Although tablets that have built-in cellular data functionality cost more than WiFi-only models, users do not appear to expect tablet devices to be subsidized, despite the subsidized pricing for MiFi equipment, USB modems and of course smartphones. Yet in a classic case of a telecommunications carrier wanting to "have its cake and eat it too," individual-line terms and early termination fees still often apply to tablet plans.

Voice and Messaging are now subservient to Data
One of the interesting attributes of the AT&T Mobile Share plans and Verizon Wireless Share Everything Plans referred to above is that they all provide unlimited voice and messaging allowances. The price only varies with how much data you need, and across how many devices.

This reflects the growing dominance of data in wireless pricing and in what is important to carriers: The days when carriers were concerned that VoIP applications like Skype would cannibalize their voice revenues seem long gone. Indeed, Unified Communications solutions such as Microsoft Lync are making VoIP via cellular data part of an enterprise's core IT strategy, driving data and smartphone usage up and cellular voice minutes down.

While voice minutes are not yet anywhere close to being thrown in for free, messaging usage (SMS and MMS) is rapidly trending in that direction in competitive procurements, with customers extracting significant messaging allowances at no additional cost. This also helps to tackle a major rate plan optimization challenge. Whereas most sophisticated buyers of wireless services have become adept at optimizing voice rate plans (i.e., making sure that individual users are placed on the most cost effective voice plan for their particular usage profile), we routinely find that messaging usage and plans are far less optimized, and significant messaging overage costs are being incurred. However, when an enterprise can negotiate a significant message allowance for all of its users, messaging optimization becomes a non-issue for all but the most text-addicted.

One pricing concept that we do not expect to see is the sharing of messaging allowances across multiple pools of users--as the price point for messaging continues to erode, pooling messaging allowances becomes more trouble than it's worth.

The impact of BYOD





COMMENTS



May 31, 2017

In the days of old, people in suits used to meet at a boardroom table to update each other on their work. Including a remote colleague meant setting a conference phone on the table for in-person pa

April 19, 2017

Now more than ever, enterprise contact centers have a unique opportunity to lead the way towards complete, digital transformation. Moving your contact center to the cloud is a starting point, quick

April 5, 2017

Its no secret that the cloud offers significant benefits to enterprises - including cost reduction, scalability, higher efficiency, and more flexibility. If your phone system and contact center are

May 24, 2017
Mark Winther, head of IDC's global telecom consulting practice, gives us his take on how CPaaS providers evolve beyond the basic building blocks and address maturing enterprise needs.
May 18, 2017
Diane Myers, senior research director at IHS Markit, walks us through her 2017 UC-as-a-service report... and shares what might be to come in 2018.
April 28, 2017
Change isn't easy, but it is necessary. Tune in for advice and perspective from Zeus Kerravala, co-author of a "Digital Transformation for Dummies" special edition.
April 20, 2017
Robin Gareiss, president of Nemertes Research, shares insight gleaned from the firm's 12th annual UCC Total Cost of Operations study.
March 23, 2017
Tim Banting, of Current Analysis, gives us a peek into what the next three years will bring in advance of his Enterprise Connect session exploring the question: Will there be a new model for enterpris....
March 15, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, discusses the evolving role of the all-important session border controller.
March 9, 2017
Organizer Alan Quayle gives us the lowdown on programmable communications and all you need to know about participating in this pre-Enterprise Connect hackathon.
March 3, 2017
From protecting against new vulnerabilities to keeping security assessments up to date, security consultant Mark Collier shares tips on how best to protect your UC systems.
February 24, 2017
UC analyst Blair Pleasant sorts through the myriad cloud architectural models underlying UCaaS and CCaaS offerings, and explains why knowing the differences matter.
February 17, 2017
From the most basics of basics to the hidden gotchas, UC consultant Melissa Swartz helps demystify the complex world of SIP trunking.
February 7, 2017
UC&C consultant Kevin Kieller, a partner at enableUC, shares pointers for making the right architectural choices for your Skype for Business deployment.
February 1, 2017
Elka Popova, a Frost & Sullivan program director, shares a status report on the UCaaS market today and offers her perspective on what large enterprises need before committing to UC in the cloud.
January 26, 2017
Andrew Davis, co-founder of Wainhouse Research and chair of the Video track at Enterprise Connect 2017, sorts through the myriad cloud video service options and shares how to tell if your choice is en....
January 23, 2017
Sheila McGee-Smith, Contact Center/Customer Experience track chair for Enterprise Connect 2017, tells us what we need to know about the role cloud software is playing in contact centers today.