John Giere, President and CEO, Openwave, 1/2/2013
Consumer behavior used to be predictable and consistent. We were offered
packaged deals, in-store-only purchases, annual subscriptions, and other
means of obtaining items and things that locked us in. Consumers were willing
to make a commitment and accept that they might not always use the goods
and services to the extent they anticipated.
In today’s new consumer economy, consumers want more control over what they buy. They’ve
begun a transition towards an application-based purchasing mentality. Consumers want the option to
purchase only what they need and, even then, to pay only for what they use. They expect vendors to
offer goods and services in bite-sized portions, and in terms they can easily understand.
Take the iTunes model, for example. People used to go to record stores and purchase entire CDs,
even if only for a handful of songs. Now, these same buyers are able to purchase individual songs -only the songs they want. Moreover, in cities such as London, we see racks and racks of rental
bikes: No need to buy and maintain your own bicycle, just insert your card, use it for an hour, and
leave it. In this new consumer economy, purchases are broken down into granular, easily
quantifiable choices so that people pay for, and get, only what they want.
Are you a panther or a dolphin?
More companies are successfully adopting this application-based pricing model, and it’s no wonder
mobile operators have gotten in on the game. This pricing model enables them to offer personalized
plans to subscribers rather than encouraging them to add another non -descript “bucket” of MBs or
GBs to their plans. Orange SA , for example, offers different pricing plans that are modeled after
animals. “Panther” is for heavy texters and offers unlimited texting, while “Dolphin” offers unlimited
email and Internet to subscribers on-the-go.
This innovative mobile data charging model gives mobile operators the insights to eng age with
subscribers and offer services that they know the subscriber would be interested in purchasing,
whether it’s a roaming pass for a day, premium video access for the week, or tethering for the
month. At the same time, subscribers can buy and use data with confidence as they’re in more
control of the types of services they purchase.
Most consumers aren’t able to discern how many bits are in an app download, or how many bytes it
“costs” to visit a mobile website. Bits and bytes just don’t translate well into today’s consumer
behavior metrics. Because of this, carriers like Orange have developed sophisticated data product
offerings and begun to promote them in simple language to target subscriber segments. These can
be offered either as tailored plans or as one-off promotions. Carriers are now opting for applicationbased charging to help quantify bundles of bits and bytes in terms comprehensible to consumers.
Another example of application-based pricing is that of streaming video plans. It’s easy to lose track
of how much data has been used when someone is streaming his or her favorite show. That’s
why Du, a United Arab Emirates-based telco, bills for video traffic separately from data. By treating
video data as a different data element, Du offers different data packages, ranging from a starter plan
designed to introduce feature phone users to the mobile Internet, to a premium video package for
heavy users with smart devices. Du has the capabilities to identify subscribers who regularly watch
videos on their mobile devices and offer them the option of purch asing plans that are tailored for
them. Here in the US, a few operators such as C Spirehave also started to price separately for
premium video.
The new consumer economy is helping ease the transition from bits and bytes to hours and minutes,
and things people understand. As operators work to provide more granular and meaningful offerings,
consumers and providers alike will benefit from the increased transparency. The mobile data market
is finally catching up with the rest of the world, and the new consumer economy is here to stay.