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Mobil ARPU is Declining

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Home GENERAL English

Mobil ARPU is Declining

globaltelconews-admin by globaltelconews-admin
11 November, 2011
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A comprehensive new report entitled Mobile Internet Usage & Pricing worldwide – 2011 to 2016 into global Mobile Data Pricing including both Mobile Internet (smartphone) and Mobile Broadband (flash USB modem) applications reveals that Mobile Data services are seen as being of increased importance to the future of the MNO seeks to grow revenues as voice and messaging services face increased competition and regulatory pressure worldwide. Mobile Data Revenues are increasing for the majority of MNOs but still account for a relatively low percentage. ” Data ARPU range from as low as 8 per cent up to 19 per cent of total MNO service revenues ” in developed markets.

The report shows that Mobile Data service revenues are now increasing sharply from a low initial base and are now making a significant contribution to maintaining overall ARPU levels with growth rates particularly pronounced in developing markets. And even in developed markets 90 per cent of smartphone sales (which use 3G & HSDPA+ networks) are Post Paid, with only around 1 in 10 Pre Paid users owning a smartphone.

MNOs are gradually introducing new pricing models for Mobile Data services and are starting to move away from a pure monthly data usage allowance based tariff towards a tiered pricing structure. The tiered pricing structure typically involves a data usage allowance which is combined with a range of different download access speeds.

Over the last 12 months, MNOs have moved to a tiered pricing purely by access speed, with pricing for theoretical download speeds of between 7.2 Mbps and 21 Mbps with higher access speeds commanding a price premium.

The report too covers the so-called unlimited mobile data tariffs even though selected operators (including Verizon Wireless, AT&T and Telefonica O2 UK) have moved away from a flat rate unlimited data service for smartphones towards a tiered pricing strategy. MNOs continue to promote services as unlimited however they rely on a Fair Usage Policy (FUP) which can be as low as 500 MB decided on by the provider. After the FUP amount is reached the download Mobile Data access speed is throttled back to a nominal amount, ranging from 32 Kbps up to 384 Kbps.

The monthly data usage allowances are also increasing in key markets, with the highest allowance being the 100 GB monthly data usage allowance offered for Platinum smartphone users by Nawras in Oman. Mobile Broadband services particularly where HSDPA+ services have been launched in selected African countries are also offering monthly data usage allowances of 30 GB up to 60 GB, significantly higher than in other markets.

The TCL Mobile Data report also highlights the key innovations taking place in pricing which include the following:

  • The adaption of tiered pricing models
  • The bundling of social networking services
  • The introduction of low data bundles of 100 MB per month to assist user uptake
  • The growth in low cost smartphones typically for Pre Paid users of 100 to 115 Euro
  • The growth in Pre Paid services
  • The use of new low cost price rental schemes for selected smartphones in emerging markets

In short MNOs are still considering how to best provide applications for Mobile Data services which are separate from data access or data bandwidth services in order to increase revenues. But these services are still at an emergent stage. In Asia a range of operators offer a wide range of gaming applications, and elsewhere services include Mobile TV and Mobile Music services most of which content is provided in partnership with third party content specialists.

But in all cases the MNO is facing severe competition from both the smartphone manufacturer which is preloading its own content and payment service and the content specialist. In some cases the MNO is offering a service bundle which includes the content specialist service (such as the Rhapsody Premium music service) as a premium service bundle. As yet MNO has not launched its own mobile VoIP service and continues to be wary of cannibalising existing voice revenues.

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