Innovative pricing can boost Euro telco profits
Operators not wanting to compete on price should look for more original pricing 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 among the most innovative markets and, in terms of operators, both TIM and O2 featured twice in the Top 10.