Sunrise Launches Daily Unlimited Plan

Swiss operator Sunrise is extending its unlimited mobile offer to prepaid customers, offering unlimited communications for 24 hours for CHF 2.50 (US $2.57). This includes unlimited calls, SMS and MMS in Switzerland, as well as unlimited data at up to 300 Mbps. The 24-hour period starts whenever the user initiates the first call, text or data connection. Sunrise said the offer will work well for tourists and other customers who may not use their phone everyday.

Sunrise also introduced new mobile broadband offers for users of laptops, tablets or mobile Wi-Fi hotspots, replacing its previous Take Away Freedom subscriptions. All three new plans come with unlimited data, while the price varies according to speed, at CHF 9.00 (US $9.25) per month for up to 2 Mbps, CHF 19.00 (US $19.52) for up to 10 Mbps and CHF 49.00 (US $50.34) for the maximum 300 Mbps plus 1 GB of roaming data in its Region 1, which includes Europe, the United States and Canada. No minimum contract is required with the plans, and customers with a Freedom or Home subscription receive a 10 percent discount. In addition to a mobile hotspot from CHF 1.00 (US $1.03), Sunrise also offers a SIM for CHF 9.00 (US $9.25) per month that allows customers to use their smartphone plan on another device.

With these offers, Sunrise is responding to increased consumer demand for both flexibility and generous data. Unlimited offers have traditionally been aimed at higher-end postpaid customers. Offering unlimited calls and data not only to prepaid customers but on an ultra-short-term, essentially pay-as-you-go basis is unusual, and appears to address the needs of a niche demographic—tourists and travelers who will not need the service long-term or even every day during their trip, but who will use their smartphones heavily when they do use them. As an alternative to international roaming charges (for users from outside the EU, of course, after the end of such surcharges there in June), Sunrise’s offer seems like a very good one, with the daily price low enough not to be a deterrent to use.

Sunrise also extends the unlimited concept to long-term plans, at least as far as data is concerned, and again with flexibility in mind, as embodied in the no-contract provision and in the SIM offer allowing the plan features to be accessible from another device.  

Since unlimited data offers are a gamble for operators, there is an incentive to hedge them in some way. In this case, we wonder whether the strategy of differentiating the plan levels by data speed is a sound one. The trend in the worldwide mobile marketplace is toward ever-greater speed, and consumers increasingly use apps and services (such as streaming entertainment content) that demand very high data speeds. Therefore, lower prices contingent on lower speeds may not be particularly appealing to the targeted users—even if those speeds are adequate for most purposes. 

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 

Redefining a Mobile Service Provider

There is a paradox at the heart of the mobile telecom industry. Despite skyrocketing data use and proliferation of connected devices, the industry is facing a structural crisis that raises serious questions about its sustainability and growth. With mobile penetration rates in almost all markets well above 100 percent, competition among MNOs has grown fiercer and more focused on price reductions. Traditional sources of revenue have been undercut by OTT services such as WhatsApp and Skype. The increase in consumer data usage has been a mixed blessing in that it has placed pressure on operators to make expensive improvements to the capacity and coverage of their networks. Finally, national regulators have become increasingly activist with regard to pricing, M&A activity and service requirements, further increasing costs for providers.

In the face of this paradox—increasingly large amounts of money flowing through the mobile industry while operator revenues grow ever flatter—we expect to see new business models, revenue drivers, pricing strategies and even leading players. Ultimately, the results of these changes could be the redefinition of the term “mobile service provider.” We have already begun to witness the first steps of this process. MNOs have worked to reevaluate their core offerings in order to find new sources of revenue or to reduce churn. The defining trait of 2014 was MNOs’ drive to acquire the infrastructure needed to offer converged packages. Operators around the world—but particularly in the hypercompetitive European markets—pushed to lock in customers and raise monthly spending by offering quad (mobile, fixed voice, broadband and cable television) packages. Further, non-core value-added elements like Spotify, Netflix and other content-driven services became increasingly important in plan construction, forcing operators to branch out into new partnerships and ventures.

A dramatic recent example of this occurred in the U.S. with Verizon’s US $4 billion acquisition of AOL—a play to secure AOL’s mobile ad software, more proprietary content and new revenue streams in an increasingly competitive market. This type of news is an illustration of how the distinction between content creators, information aggregators, device manufacturers and service providers continues to grow blurrier. Just as we expect mobile operators to be packaging more non-traditional features in with their mobile packages, we believe that there is an opportunity for other types of companies to enter the mobile services space and use these services as a way to augment their traditional packages.

With Facebook’s acquisition of WhatsApp and Google’s ever-expanding reach across all realms of digital life—including its recently launched U.S. MVNO running on the Sprint and T-Mobile networks and its discussions with Hutchison Whampoa for international expansion—we would not be surprised to see either of these entities begin to pivot increasingly into mobile service as an add-on to their traditional offers. While projects like Google Loon/Fiber and Facebook Zero made headlines before retreating from the industry consciousness, the economic conditions that initially drove these initiatives remain—giant internet content providers that have significantly higher margins are growing impatient with mobile and broadband providers’ ability to connect their potential customers. Further, MVNOs like FreedomPop are experimenting with new business models like ad-based data sales. Finally, whether through mesh networks, ever-expanding Wi-Fi hotspots or new technology solutions, MNOs’ hegemony over mobile data is likely to be challenged in the coming years. The high and growing demand for large volumes of fast data makes the industry a prime target for disruption if an adequate alternative presents itself.

There are so many variables in play that it is impossible to make a firm prediction as to the precise long-term evolution of the industry. However, this much is certain—for MNOs to be successful in the future they will have to be adaptive and flexible in terms of developing new revenue streams and fending off non-traditional rivals. Maintaining outmoded plan structures and customer acquisition strategies will almost inevitably lead to painful disruptions. The current structural and competitive environment have the potential to change the core MNO business model in a way not seen since the launch of the iPhone in 2007 and the beginning of the mobile-data revolution. As such, strategic choices made by operators in the coming years will have an outsized impact on the future of the industry as a whole.

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. Click here to contact a Tarifica Analyst

Sprint Signs Multi-Year Wi-Fi Agreement With Boingo

Boingo Wireless, a U.S.-based Wi-Fi provider, and U.S. mobile operator Sprint announced a multi-year Wi-Fi agreement that will enable access to Boingo Wi-Fi networks in 35 major U.S. airports. Sprint devices within proximity of a Boingo hotspot can automatically connect to the Wi-Fi network, providing service at the fastest speeds available, whether via Sprint cellular or Boingo Wi-Fi. The auto-authenticating Wi-Fi connections are available at no additional charge to all Sprint customers with capable devices. An important trend in the mobile telecom market today is the way Wi-Fi is increasingly being integrated with cellular service. “With Wi-Fi being the world’s largest wireless ecosystem, we view it as a highly complementary layer to our network,” Sprint CTO Stephen Bye said in a statement. “By enabling customers to move seamlessly between secure Wi-Fi and cellular, our customers will have a better mobile experience in more locations, all while lowering their cost of data usage.” It is interesting to compare concept of Wi-Fi as a backup or complement for 3G/4G service with a related concept just announced by Google, called Project Fi, which also involves a partnership with Sprint. Google says it will be offering MVNO service on the networks of both Sprint and T-Mobile, but with Wi-Fi as the default first option that its devices will seek. In Project Fi, cellular will be the backup, rather than the other way around. We have seen several other Wi-Fi handoff services announced recently, generally device-specific and not as ambitious as Project Fi. In our view, in order for such offerings to be truly appealing to consumers, a critical mass of Wi-Fi hotspots or networks must exist in places where consumers find themselves needing or wanting to obtain connectivity. Public Wi-Fi is expanding but is still well short of being truly widespread in most regions. Boingo and Sprint, with their offering, have the advantage of being able to depend on a guaranteed existing set of Wi-Fi hotspots in airports, where there is known customer demand. While limited in its aims, the multi-year agreement between the two companies appears to be a win-win proposition. 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. Click here to contact a Tarifica Analyst

Boingo Signs Wi-Fi Offload Deal With U.S. Tier-One Carrier

Wi-Fi and distributed antenna system provider Boingo Wireless has signed a tier-one U.S. wireless carrier to a multi-year major Wi-Fi offload agreement. The deal will include deployment on up to 40 million of the carrier's handsets for Wi-Fi offload at Boingo’s managed and operated networks in 2015, as well as the option to auto-authenticate onto Boingo’s aggregated network of Wi-Fi hotspots. The deal follows a successful market trial with millions of handsets that demonstrated automatic and seamless authentication onto Boingo’s network. The agreement covers the carrier's entire smartphone customer base. When a smartphone customer comes into range of a Boingo Wi-Fi network, the system will automatically connect their device to the network, requiring no action on the customer’s part. Additionally, this agreement includes Passpoint-certified mobile devices to leverage Wi-Fi authentication for carrier offload via Boingo’s Passpoint Secure network, which includes WPA2 enterprise-grade encryption technology.

The massive worldwide growth in data traffic, driven by smartphone use, has caused the networks of many mobile operators to be overtaxed. Offloading of traffic onto Wi-Fi networks has been and is an excellent way for MNOs to take the burden off their 3G/4G networks, and is going to be increasingly in demand as a solution. David Hagan, Chief Executive Officer of Boingo Wireless, summed up the situation as follows: “It is clear that with skyrocketing mobile data traffic on cellular networks, the need for carrier Wi-Fi offload has now arrived. This is a milestone we have been working toward for years, and we believe this agreement is just the first step in what’s to come. True, seamless Wi-Fi offload is here.” Formerly, Wi-Fi offload required the user to log in and authenticate, whereas Boingo’s solution allows devices to detect the presence of nearby usable Wi-Fi signals and automatically—and securely—access them. While the identity of the U.S. MNO that entered into the partnership with Boingo has yet to be revealed publicly, the fact that it is first-tier is a clear indicator that this technology will be very influential in the mobile market.

The seamless offload technology presages a coming wireless world in which the distinction between cellular and Wi-Fi will become largely irrelevant, as both are integrated into a single service. We have recently seen an interesting development in which U.S-based telecom products manufacturer Qualcomm developed a system that allows MNOs to use the unlicensed spectrum bands generally taken by Wi-Fi to carry LTE service. While this is in a sense the opposite of Wi-Fi offload, it still points to the general convergence between the two types of network. 

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about Tarifica: http://www.tarifica.com/contactus.aspx   

       

Concerns Regarding U.K. Public Wi-Fi Security

According to a recent survey, the majority (63 percent) of U.K. consumers would prefer mobile broadband over public Wi-Fi hotspots (26 percent) as a means to go online when out and about. Respondents expressed concern about Wi-Fi security, as well as about the often complicated sign-up forms used by access points. Other public Wi-Fi problems cited include sporadic coverage, performance and price. In the worldwide rush to deploy free public Wi-Fi, discussion of the matter tends to center on the advantages, such as cost savings and convenience for users and consumer data mining for local businesses. However, this survey is a useful antidote to the hype, pointing out that there are also some major disadvantages to the service, security lapses being the most grievous. Especially in a developed, affluent market like that of the U.K., users may determine that cost savings are outweighed by the risk of having one’s data or even identity stolen over the free and easy airwaves. If operators want to succeed with public Wi-Fi, they would be well advised to address security issues aggressively and early on.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx

New York City Seeks to Replace Payphones with Free WiFi

New York City’s Department of Information Technology and Telecommunications (DoITT) has issued a request for proposals to build a citywide network of free WiFi hotspots. The public communication points will provide free calls to the emergency number 911 and the city information number 311. The winner will install, operate and maintain up to 10,000 public communication points distributed across the city’s five boroughs. These structures will replace and supplement the roughly 7,300 current public payphone installations. The hotspots must be set up within the next four years and will be funded mainly through digital advertising. The plan is projected to bring in US $17.5 million in guaranteed annual revenue for the City of New York through June 2026.

In terms of usage patterns and functionality, WiFi hotspots are the natural successor to the old-fashioned public phone, so this plan makes sense on that level. What is interesting here, though, is that they will be funded through advertising, unlike payphones, which are funded by direct payment from the user. The City of New York is taking a page from the public WiFi solutions being offered to commercial establishments such as malls and restaurants, which are ad-funded. Of course free access to 911 is a public good. Beyond that, though, it remains to be seen whether the city will allow data sharing to benefit businesses that want to target potential customers based on their usage patterns.

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes two noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx

Maroc Telecom Launches Free Hotspot Service

Moroccan fixed and mobile operator Maroc Telecom has launched an internet-access solution called WifiPub that allows users to access the internet at various hot-spots located in public places such as hotels and restaurants. Connection is free, but users must watch an advertisement lasting about 10 seconds before the internet session can begin. The service also offers data-mining applications for advertisers, giving them the ability to locate users, determine purchasing profiles and obtain real-time reports on the whereabouts and number of visitors. 

With interactive ad revenues on the rise worldwide, funding internet access through ads makes a great deal of sense. In addition, public WiFi has a value-added aspect for advertisers, namely the data-mining capacity which allows them to more effectively target potential customers. Again, free access to data can be a very effective driver of internet-based commerce and a boon to both operators and their partners in terms of eventual revenue.

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes two noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx