Deutsche Telekom Offers Annual Data Bundle on New Business Plans

Deutsche Telekom has launched new business mobile plans that include the option of annual, rather than monthly, data allowances. The new range has a choice of four plans, of which the prices vary from €29.37 (US $34.66) per month for 2 GB of data on the S plan to up to €69.71 (US $82.26) per month (prorated) for 144 GB per year on the XL plan. The annual data option is available on the M, L and XL plans.
 
All the plans come with features such as One Number, so the business’ fixed number is displayed to a mobile call recipient; free replacement of lost or damaged SIMs; secure login applications and a new smartphone within 24 hours. Smartphones can be added with the new plans, starting from €46.17 (US $54.48).
 
This offering from Deutsche Telekom seems particularly well-tailored to the needs of small and medium-sized businesses. As we have reported in the past, SMBs are eagerly embracing bring-your-own-device (BYOD) and tend to be budget-oriented when it comes to mobile services. They are also more likely than large, diversified businesses to have seasonal ups and downs in terms of revenue.
 
According to DT, the annual data allowance was planned specifically with seasonal business patterns in mind; customers may use more or less data during any given a month due to changes in business activity and would in many cases prefer to not to pay for data that goes unused because the allowance surpasses the need. The yearly allowance concept directly and appropriately addresses this issue, and therefore looks like a winner in terms of plan design.
 
Furthermore, we might point out that yearly data is very much in line with the current trend toward greater and greater flexibility in plan feature. The demand for flexibility has usually been discussed as if it were exclusively a consumer phenomenon, but it seems likely that in assuming that it also pertains to SMBs, DT has not gone wrong.
 
Finally, the new business suite’s other features, such as displaying the company’s fixed number and quick replacement of lost devices, are also thoughtfully designed and appropriately targeted to SMBs that rely on BYOD for their employees’ connectivity.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. 

To learn more about Tarifica, please visit www.tarifica.com 

The Case for Designing Data Plans in Concert with Messaging OTTs

Since coming to popularity, Over-The-Top (OTT) services have proved a serious challenge for mobile network operators (MNOs). These internet-based services ride on top of operators’ networks, and those that offer free or reduced-cost messaging or calling compete directly against operators’ core sources of revenue. OTTs are a threat to the foundation of the traditional MNO business model. This challenge is driven by two factors: First, OTTs have the capacity for rapid, viral growth—services can rise quickly and add users at a pace that changes a market’s fundamental dynamics before MNOs can execute a strategic response. Second, these services tend to significantly reduce operator revenues—the increased data usage from OTT messaging does not even come close to making up for the loss of SMS and voice revenues. It is estimated that, on average, SMS messaging generates 50,000 times more revenue per megabyte than data usage. Given the ever-expanding number of services that OTTs provide and the popularity of these services, the ultimate conclusion of this trend could be the so-called “bit pipe” scenario, in which all industry innovation—and profits from that innovation—move to external players and MNOs are effectively transformed into utility companies that sell mobile data access. In this scenario, data becomes a commodity with ever-decreasing returns, and MNOs are only able to differentiate their services on the basis of network strength, speed and price. Understanding the stakes of this existential threat, MNOs have tried many strategies to mitigate the effects of OTTs, slow their growth or recreate OTT offerings under MNO auspices. All of these strategies have either not achieved the scale needed for replication or have failed outright. Given the magnitude of the challenge facing the industry and the inability of conventional options to address it, it is time for MNOs to embrace a radical solution—moving away from plans structured around  voice and SMS features and partnering with OTTs to build plans that leverage the strengths of both OTTs and operators. Tarifica believes that MNOs should embrace a strategy of partnering with selected OTTs and building targeted plans with them. This approach offers operators three critical benefits:  Marketing Enhancement—MNO/OTT plans provide significant branding advantages to operators by linking mobile services with “trendy” companies and providing operators with the ability to advertise the real-world benefits of these services—such as advertising WhatsApp messaging, Skype video calling or Spotify music streaming—rather than the abstract concept of data, which is often hard for consumers to grasp. New Revenue Stream—While OTTs have excelled at customer acquisition, many have not yet identified how to monetize this huge base of users. Critically, many lack a fluid, in-app solution for selling users premium content. This opportunity pairs well with MNO strengths and needs alike. MNOs can offer partner OTTs direct-to-carrier billing, which would provide users with an instantaneous and seamless means of paying for services. For operators, this would provide a tie-in to a new and expanding source of revenue. Reduction of Tensions With OTTs—By establishing a shared revenue source with OTTs, MNOs will create a direct channel to some of the most dynamic actors in the market and, ultimately, foster a climate of mutuality with these actors in which all have strong incentives to build a future environment where both entities will flourish. MNOs that succeed in this new frontier of mobile offerings will likely operate under several guiding strategic principles as they adjust to this significantly different environment.  First, any new plans created will offer significant revenue upside for operators—whether through decreased churn, increases in existing revenues or new opportunities. Operators that enter this arena halfheartedly without a clear understanding of OTTs and a specific strategy for how to leverage their strengths will be unlikely to have any success. Second, successful operators will create plans that are truly symbiotic and sustainable for themselves as well as for the OTTs involved. Many MNOs will be tempted to push for substantial concessions from partners that will undermine the core of the OTT business model. These plans will be rejected by popular OTTs and leave these MNOs working with inferior partners. Finally, successful operators will act decisively to forge new partnerships and bring these plans to the market. As noted, OTTs excel at identifying market needs and adapting rapidly in order to provide new services. To succeed in this environment, MNOs need to emulate this culture of institutional nimbleness. The success of these kinds of initiatives will depend on capturing fleeting market opportunities, and the most successful MNOs of tomorrow will be those that adapt institutionally and embrace the expectation of rapid change. This article is an excerpt of a presentation given by Tarifica at the Pricing Mobile Data Conference in London. For specific examples of plan types that are well suited for partnering with OTTs, deeper analysis of the current market conditions or further information on any point in this article, please visit: http://bit.ly/1sSgB8D to view the full Tarifica presentation.

Promotions are the Critical Driver of Consumer Value for Australian Mobile Phone Plans

Tarifica  has announced the latest Tarifica Scores for postpaid mobile plans in Australia. The Tarifica Score™ is an advanced algorithm used to evaluate mobile plans based on the value they offer consumers.  It incorporates every aspect of each mobile plan (including usage allotments, geographic coverage, data speeds, value added features and promotional elements) and weighs them against each plan’s total costs to determine its consumer value. 

Based on the postpaid plans offered in September by operators Telstra, Vodafone, Optus and Virgin Mobile, Optus’ “My Plan Plus $60” continued to be rated highest in the ‘without phone’ segment while Vodafone’s “Red $80 Plan” still ran second.  Virgin Mobile’s $100 Plan displaced Vodafone’s “$100 Red Plan” as highest in the ‘with phone’ segment.

“The largest changes we saw in scores were driven by the addition or expiration of promotions,” said Sergey Fisun, Tarifica’s Australia Analyst.  “For example, Virgin Mobile’s best ‘with phone’ plan in June ($90/month) received a score of just 48 but its replacement plan ($100/month) led the market in September with a score of 100, displacing Vodafone.  The difference was due to the addition of 2 gigabytes of data per month plus a promotional bonus of another 1 gigabyte each month.  In short, Virgin’s slight increase in price was more than offset by its enhanced data offerings.”

In contrast, Vodafone ended its double data promotion and saw its highest scoring ‘without phone’ plan drop by 10 points while its best ‘with phone’ plan fell from the top spot in that category to second place with a score of 94.  In general, Vodafone’s lower priced ‘with phone’ plans now come with two months of unlimited data, which helped to lift their scores.  Its higher priced Red series, however, which switched promotions from double data for a year to unlimited data for two months, saw their scores decline.

Although Telstra’s plans still suffer from high costs relative to the volume of voice, SMS and data offered, many of its scores improved due to changes in its data promotion from a one time (one month) offer of an additional 25GB (which was considered by the Tarifica Score algorithm at much less than full volume due to its impracticality for most users) to an additional 500MB per month which is obviously of more value.  Telstra’s Mobil Accelerate XL plan improved from a score of 35 to 48 as a result of this change.

“In today’s mobile marketplace, consumers are flooded with hundreds of plan variations and constantly shifting promotions and deals—the majority of which come with different costs and services and access networks of differing strengths. When making a decision that will likely impact them for up to two years, consumers can use Tarifica Scores to cut through the clutter and identify those plans in every market segment that offer the best value for the money.  They can also see how plan values are affected by even small changes in promotional offers,” stated Tarifica Program Manager, Will Watts.

Ken Dolsky, Senior Program Director at Tarifica also commented on the market intelligence value to operators.  “We also see great interest in the Tarifica Score among mobile operators.  Tarifica provides access to its proprietary model which enables operators to design plans that score high in consumer-friendliness and value.  They are also able to quickly see, in quantitative terms, the impact that competitive changes have on the market.  While all the operators in a region may know that operator X has high prices and relatively slow speeds, the impact of improvements in such factors will be immediately apparent and responses can be formulated quickly.”

To Contact Tarifica's Research Team: http://www.tarifica.com/contactus.aspx