How to fight against falling ARPU

I don't need to tell you, our readers, about the pressures facing operators in Europe. The economic downturn, increased regulation that has affected call termination rates and roaming costs and the onslaughts from over-the-top players have created a perfect storm for operators. To be sure, operators are now taking steps to protect their future businesses, and are exploring ways to boost revenue. Yet monetising data, which is really what this all boils down to, is hard to do.

The latest feature from FierceWireless:Europe discusses some of the approaches that operators can take to prop up falling revenue from calls and texts, such as charging extra for LTE data services and finding alternatives to expensive smartphone subsidies. Discussions with analysts and operators on the various issues yielded some interesting and at times unexpected findings. For example, attitudes about placing a premium  on LTE pricing are surprisingly diverse. EE in the UK insists that a premium on its LTE plans is a sustainable business model and the operator clearly has no intention of changing course for now. I put this attitude to an Oracle executive, and the look of incredulity on his face was a sight to behold. He evidently felt that premium pricing was a short-term measure at best.

In addition, while EE may be taking this approach, one of its parents, Orange, may not necessarily follow. Although careful not to comment on or criticise EE's pricing strategy, Orange's vice president of mobile strategy, Daniel Gurrola, did not seem to give much credence to premium pricing as a long-term strategy, although he saw value in it for first movers

A constant refrain from analysts, meanwhile, was that Europe's operators can and should learn from the LTE experiences of mobile operators in the United States. As things stand, European operators are certainly slow to adopt strategies that many analysts believe are key to driving growth from future LTE data plans. One of these strategies is data-sharing plans. Although there are now several examples in Europe of multi-SIM options that allow subscribers to share their data allowances between a tablet and a smartphone, plans that allow multiple devices and a shred pool of data are not readily available.

In summary, it's not going to be an easy balancing act, and operators have some tough decisions ahead of them as they seek to prop up ARPU on one hand, and keep their cost base down on the other. For more on this topic, check out the feature.--Anne

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