Tariff Consultancy Ltd (TCL) in the latest version of its TCL Tariff Trends SnapShot subscription service (SnapShot 40 Pricing for QoS and Bundling) analyses how MNOs are differentiating their premium services. With the first launch of LTE 4G services MNOs offered high-speed service access as only a premium service. But since launch, LTE 4G services have been introduced as a standard product across all mobile data services in most established 4G markets.
There have been some exceptions. TCL SnapShot 40 finds that only a few selected MNOs (including Swisscom (Switzerland), Vodafone (Germany) & Elisa (Finland)) are pricing their LTE 4G Smartphone packages of calls, SMS & Mobile Data according to access speed.
Elisa, in particular, is providing distinct pricing for 2G access, 3G access, 4G access & 4G Super access with speeds ranging from up to 0.25 Mbps up to 150 Mbps but with unlimited SMS, calls & Mobile Data services.
But the majority of MNOs in the established markets of Europe and North America are offering LTE 4G services with the same access speed across all customer segments. Instead of pricing according to access speed, most MNOs are increasingly differentiating their pricing with the use of additional bundles, including content, mobile insurance, international calls, international roaming and shared data, voice & SMS (including additional SIM cards).
The number of different bundling options is increasing due in part to MNOs seeking to protect a premium price point and also to provide further differentiation on top of the traditional bundle of calls, messaging & mobile data.
Mobile operators are seeking to add more bundled options to in order to maintain an existing price point as in the Danish market, with Telia Denmark (including shared data, additional SIMs, insurance & TV content) – or to differentiate their bundles from a competitor at a lower price point as in the French market, with Orange (including IDD calls & roaming to specific destinations).
Some MNOs (including Vodafone Qatar) are offering extra optional bundles (selected by the user) from a list of services providing the user selects a certain plan. Tele2 (Sweden), provides a free HBO Nordics TV subscription to users who purchase a 3 GB mobile data plan or above.
Orange (France) offers the premium Origami Jet Prime tariff user the opportunity to change their mobile handset after a 12 month period.
And SFR (France) is providing a priority service across its mobile internet platform to premium users of its Carre bundled service at busy times. But this service is disclosed in the operators terms & conditions and is not publicized.
In markets where many established MNOs now offer 4G services, independent surveys from analyst firms or from the telecoms regulator are highlighting the differences between MNO 4G coverage and service availability. But even when publicized the variation in 4G network coverage is not translating into pricing by QoS, with disruptive MNOs continuing to act as a brake on overall price levels.
And with the launch of enhanced LTE 4G download speeds, MNOs are continuing to make the service available to all users who have suitable devices – are not yet charging a price premium. For example, both SingTel (Singapore) and Verizon (USA) have launched higher speed versions of their 4G services at no extra charge to their users.
Finally, MNOs are now productizing customer renewals and upgrades into a standard package. For example, Telstra (Australia) offers a package of 500 MB of Mobile Data or AUD $500 of calls on selected plans to customers select the Telstra Upgrade plan.
Although the spread and number of MNO bundles and options available for the user is increasing, it makes the task of comparing rival offers more difficult. By offering more content to protect a price point rather than provide different types of QoS, the MNO has avoided the decision of reducing speeds for different customer types.
But instead the MNO is becoming locked into the need to continually add more content options to add value to customer bundle, frequently as a defensive measure to protect the same price point.