Teligen Tariff and Benchmarking

Strategy Analytics is a leading expert on telecommunications tariffs research and analysis, with over 20 years of experience supporting OECD and EU operators and regulators.

February 7, 2011 11:29 jsephton

It is difficult to tell whether dazzling array of choice in mobile tariffs is designed to empower users, allowing them to tailor their package precisely to their usage, or whether it is covertly trying to confuse and confound them. For years, there has been a push towards consumer choice and transparency at every level, driven by both market forces and regulation. And on that front, it is hard to dispute that that is exactly what we have now. Undoubtedly, users have benefitted from this choice, but if we were to dig a little deeper, we would most likely discover that a significant proportion are on the wrong package according to their usage, and that they have been for a long time. It is partly inertia, of course - many people simply can't be bothered to sort it out - a kind of better (and easier) the devil-you-know attitude. For those that take the plunge, however, it quickly becomes evident why inertia is such an attractive option, as deciphering and comparing across each offer is no easy task. The table below, taken from Teligen's online mobile tracking service, TCO, looks at a selection of mobile operators across Europe, and how many mobile plans they offer, including the various permutations and combinations that comes with each[1].

Country

Carrier

# plans

France

Bouygues

85

 

Orange France

67

 

SFR

77

Germany

E Plus

11

 

T-Mobile Germany

23

 

Vodafone Germany

28

Italy

H3G

13

 

Telecom Italia Mobile

9

 

Vodafone Italy

16

UK

O2 UK

35

 

T Mobile UK

43

 

Vodafone UK

94

Undoubtedly, it will be fairly straightforward to thin the list of options down to a slightly more manageable number to choose from, based on the device, whether a user wants prepaid or not, or prefers a 12 month or 24 month contract, and so on. And some countries don't have quite such a tortuous list to choose from. However, it is worth mentioning that add on packages, such as extra SMSs, are not included in our table - put these into the mix and we're dealing with even more variations. By any standards, this really is a minefield, especially if you are trying to compare across providers.

The added dilemma for many is that they don't have a firm handle on their overall usage. Voice calls might be a known quantity for some, as might SMSs, although these might vary dramatically from day to day, week to week and month to month. And when data is thrown into the mix, as is increasingly the case, the waters can get very muddy.

A handful of operators will proactively inform users that they are on the wrong plan, and suggest an appropriate alternative, but often, switching to the right one will require the signing of a new contract, which will usually tie the user in for at least another 12 months.

It would be good to see operators take the initiative, and make the apparent choice and flexibility a genuine reality for customers, rather than bombarding them with a bewildering array of continually evolving plans and options. And to be fair, some are trying, but there is still a long way to go.


[1] Source: TCO, Teligen. Does not including family or group plans with sharing allowance, youth, student senior, business plans or data only plans e.g. for tablet devices such as the iPad. Also does not include ?add-ons, such as an extra SMS bundle. Operators in Italy, for example, offer a lot of add-ons.


February 2, 2011 16:24 jsephton

Our appetite to be contactable and to access information while on the go, be it with streamed media, email or just simple voice, has grown exponentially over the past few years. And, for reasons of form factor, functionality and pure processing power, it has also outgrown being delivered by a single device. For a while, much of what individuals on the move wanted to do could be delivered by smartphone functionality and form, even if some of the transactions were somewhat awkward because of the device size. The laptop, and later, the netbook were added to the mix. More recently, we have seen tablets permeate the list of seemingly essential mobile devices. While it is undoubtedly useful to have different devices designated for both specific and general tasks, it also means that users usually find themselves taking out a separate data subscription for each device they want connected. For some, however, the volume and type of traffic they generate while on the move is unlikely to differ significantly whether they using one device or three, which means they are probably paying for more data than they actually use, particularly if each subscription comes with a hefty data allowance.

While this is not a happy place for users to be - no one wants to pay for three data subscriptions when they really only need one - it has the potential to be pretty lucrative for mobile operators. Unless, that is, users start to be more proactive with their data management - using WiFi hotspots much more, opting for WiFi-only versions of devices where available, and, more worryingly for operators, shopping around for offers from alternative carriers. This really isn't beyond the realms of possibility - there is already a lot of user dissatisfaction over the increasing amount of money spent on data, especially, when data quality is not particularly good.

It is not surprising then, that we are starting to see the emergence, albeit very slowly, of single data plans that cover multiple devices. The first one we came across was from Rogers Communications, the Canadian cable TV and wireless communications provider, which announced at the end of last year that it would allow customers to share existing mobile broadband plans across devices for a monthly fee - at the moment set at C$15. Whether the C$15 hits the sweet spot for users needs to be ascertained, of course. The plan doesn't provide any additional data for the extra money, and would only have appeal to users who consistently underuse their monthly data allowance across their various devices. But it is certainly a move in the right direction.

The likelihood of the emergence of similar plans in Europe in the near future is already evident. For example, there are already indications that Orange, SFR and Bouygues Telecom in France are planning to launch single subscriptions packages later this year, that cover multiple devices on a single plan.

The single plan concept is not dissimilar to the mobile WiFi (or MiFi) offers that have been around for a while now, and that carriers in numerous countries are increasingly marketing. MiFi allows users to create a wireless hotspot while on the move, using a MiFi modem or router. The hotspot will then allow shared internet access by several WiFi devices. In the UK, for example, 3, Orange and Vodafone all offer or have announced MiFi plans. Like the single plan concept, however, they do not come for free - a MiFi router is required, along with a monthly subscription, although some PAYG plans are available.

It is evident that operators are fast realizing that many users are close to their price ceiling, and that something needs to be done to maximize the revenue opportunity, whether this is through single plans or MiFi offerings. Expect more of the same to come.