During 2015 mobile data has continued to be the most relevant driver of revenue for mobile service providers. This trend is reflected in the various offerings that MNOs throughout the world have made available to their subscribers. Additionally, these creative packages, which are centered around data offerings, have been launched by operators as a way to gain new subscribers as well as to keep their current customers during times of dwindling ARPU. Promotion strategies widely implemented by MNOs during 2015 include bundling mobile data with unlimited voice and SMS, bundling offers to create quadruple plays, bundling data offers with devices and creating pricing plans that enable users to share data with other users or among several devices as well as plans that are based on content, apps or social media offerings.
We have also seen evolving trends in the way these mobile data packages are being created. The use of prepaid data plans has increased, even for low-end users in emerging markets. Operators are discontinuing unlimited offers for mobile data and creating tiered plans with different data allowances. In an attempt to get subscribers with existing unlimited data packages to switch to plans with set amounts, operators are offering faster speeds with the chosen data amounts. As users get a taste for data, their demands increase, and, if the transition is simple and convenient, mobile operators can usually upsell customers to plans with larger data allowances. Shared data bundles—for example, U.S.-based Verizon Wireless’ More Everything Plan—have resulted in subscribers wanting to connect more devices. Operators in both the U.S. and Europe have reported increased cross-selling of related products after implementing shared plans. We also believe that data plans that are created for social media apps or that are content based, such as offerings of Spotify or Netflix, will continue to proliferate, as these packages do not count against customers’ data allowances.
Proliferation of 4G/LTE networks has also had a large impact on the increase in mobile data use. We have seen the creation of entry-level 4G/LTE data plans, as well as operators—for example, TIM Italy—offering 4G access as an add-on feature to their data offerings.
We believe we will see operators pushing their innovative data offers even further in the second half of 2015. MNOs will find themselves up against disruptive strategies, particularly those from MVNOs such as Republic Wireless and FreedomPop that are offering lower data prices as well as unlimited data plans since, they are offloading users onto Wi-Fi and relying on it to reduce their costs. We believe MNOs will be creating offers that are designed to counter challenges from Wi-Fi networks created by linking together the growing number of available hotspots.
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