Tariffs

Innovative pricing can boost Euro operators' profits, claims new research

Paul Rasmussen — Fri, 21 Aug 2009 13:55:25 -0400

Operators not wanting to compete on price should look for more original tariffing structures to help boost their financial performance. This viewpoint, which might appear as stating the obvious, comes from a mobile pricing specialist research firm, Pure Pricing, that has identified 10 tariff structures from European operators that it claims could be used by others to improve their revenues.

The company claims that, having examined 500 pricing structures and offers from mobile operators across 15 European countries and the US, only a small number were judged as ‘exhibiting particularly strong pricing characteristics with regard to driving revenue per user, customer tenure or profitable acquisition'.

According to Jo Lynch of Pure Pricing, the key challenge facing many operators was to resist ‘value drift', where operators respond to price pressure by bundling additional value and services into plans for no incremental revenue.

"Instead, operators should look beyond their own markets for proposition ideas which will drive ARPU, tenure and therefore revenues. The propositions we have identified will be of interest to all operators seeking to develop new propositions within increasingly competitive markets."

The research suggests that Germany, Italy and the UK were amongst the most innovative markets and, in terms of operators, both TIM and O2 featured twice in the Top 10.

For more on this article:
Pure Pricing

T-Mobile UK: Harsh times ahead as new MD strives for improvements

Paul Rasmussen — Fri, 07 Aug 2009 12:06:47 -0400

While the mobile results reported by Deutsche Telekom in its Q2 figures were acceptable--year-on-year revenue growth of six per cent--T-Mobile UK looks set to come under the cosh as its newly appointed MD, Richard Moat, prepares to turnaround the struggling subsidiary by dramatically cutting costs and revamping its confusing array of cell phone tariffs.

In an effort to move from being the fourth-largest UK mobile operator to the third, Moat has admitted that any talk of cost reductions invariably involves job losses. Already T-Mobile is dropping its contractors but Moat does not shy away from the fact that some of the nearly 6,400 people who work for the business in the UK will likely need to go. "I think that every single aspect of the cost base has got to be critically examined and jobs are obviously part of the cost base."

Accepting that to become the No. 3 UK operator might take several years, Moat intends to reshape the company dramatically within the next few months. This will involve:

Remove all contractors--he has already cut 100 staff not on fixed contracts;
Push his direct reports to remove staff who are not reaching the objectives of their roles;
Introduce a radical new model for handset purchasing;
Set higher targets for T-Mobile's direct stores; and,
Improve and simplify the company's tariff structure

Handsets have become a critical issue for T-Mobile UK, as seen with it importing iPhones from around Europe to offer to prized customers. Presently, the company has a portfolio of around 400 handsets-- each with a range of different tariffs--leading to thousands of charging permutations.

Insiders claim that Moat will cut the device portfolio to a much smaller range, with more emphasis being placed on stocking generic phones, rather than handsets customised for its network. One interesting option being considered includes T-Mobile UK asking manufacturers to adopt a new business model--where it auctions slots for its product range, and where it defers payment on handsets. One executive with a large handset manufacturer said: "They are saying, "pay us if you want to keep the business". I would prefer the strategic relationship I have with the other operators, but I understand the T-Mobile predicament."

For more on this story:
Mobile Today and The Guardian

SIM-only: Handset vendors must react, says O2 CEO

Paul Rasmussen — Wed, 20 May 2009 12:21:00 -0400

Following the revelation that about a third of O2 UK's customers were now on a SIM-only contract--up from two per cent a year ago--the company has called upon handset manufacturers to add more relevant functionality to new devices.

According to Ronan Dunne, CEO of O2 UK, SIM-only contracts had become one of the company's strongest contributors to its positive Q1 financial results announced last week. However, he maintained that this trend was causing the handset market to polarise, with an increase in customers moving up to smartphones or down to SIM-only, and little activity within mid-range handsets and tariffs.

Dunne commented that people were not saying they aren't going to replace their handsets ever, but just changing the phasing and timing of their purchasing. "There is an opportunity for handset manufacturers here. Unless they make real changes to a handset--i.e., not just changing the screen or the colour--there won't be a real case for people to upgrade."

For more on this story:
Mobile News

3UK sets new mobile email benchmark -- unlimited usage

Paul Rasmussen — Fri, 05 Sep 2008 13:29:31 -0400

Being the smallest player in the UK market has forced 3UK to look for routes to market that might catcher the bigger, and slower moving, competition off-guard. Its latest effort is to use its success with mobile broadband -- it has attracted 500,000 subscribers so far -- to launch a tariff especially for unlimited email use.

In fact there are two data bundle tariffs -- one for 'simple' email (€3 per month for 10MB) and the other for using Exchange or Notes access (€6 per month for 1GB). However, the email access is completely unlimited and includes attachments, and those on the lower tariff will have unlimited POP3 and IMAP access, while those paying €6 will also get uncapped access to their own Exchange or Notes servers.

This packaging is more likely to appeal to handset users as against those with laptops equipped with a 3G dongle -- the latter being the majority of those that have signed for the 3UK mobile broadband deal.

For more on this story:
- go to The Register

Related articles:
Forecast: Mobile messaging spending to $88B by 2012. Report
Survey: Texting remains top consumer draw. Mobile email survey

Repackaging of existing services to remain competitive - Top 5 Trends

Fri, 18 Jul 2008 16:10:06 -0400

With the bulk of mobile revenue still being generated by voice services, there will be increased pressure on operators to remain competitive and differentiate themselves in the marketplace. This will lead to an upsurge in the bundling--or repackaging, of services, including home zones, flat-rate options, more minutes/ text messages and discounted roaming and data download tariffs.