ISPs sniff LTE opportunity

As featured on TM Forum's the Insider blog

Are we about to see another round of increased MVNO activity, with a twist? The rollout of LTE networks seems to be attracting the attention of fixed line internet service providers (ISPs), and for good reason.

Up until the advent of LTE, the idea of becoming a mobile internet provider to existing fixed line customers also meant having to provide other services like voice, and data plans that threatened to cannibalize more profitable fixed line offerings.

Of course, multi-play operators did not suffer the same restrictions and were happy to offer bundled plans to add ‘stickiness,’ but not all customers were lured into the web (no pun intended). Many astute customers were able to ‘cherry pick’ the best of the fixed and mobile data offerings and appeared quite happy keeping the two world’s separate.
Generally speaking, fixed line offerings via ADSL, cable and fiber have offered greater speed, higher usage tiers (many unlimited) and better service unfettered by the vagaries of mobile transmission into weak reception areas.
However, LTE networks are able to offer comparable speeds with the added feature of mobility and are the first real threat to the domestic and business dominance of fixed line ISPs. For enterprising ISPs, however, LTE is providing the perfect opportunity to fight back. By opting to become an MVNO and offering some very creative data plans, ISPs can offer the best of both worlds without getting bogged down with the concerns of voice service and its complex billing. After all, most of their existing customers are well versed in VOIP and messaging from third parties and OTT players.
CommsDay reports that Dodo, a well-established ISP in Australia, is about to launch a 4G mobile service through Optus’ LTE network. The catch here is that, by doing so, Dodo will become the first player in the country to offer ‘data buckets’ that can be spread across multiple devices. It will allow a single post-paid mobile plan with its data quota to be shared in conjunction with up to five devices. The ‘data buckets’ can also be shared by family members as well, just liked existing fixed line broadband plans to the home linked to WiFi.
Dodo CEO and co-founder, Larry Kestelman, believes that people currently have multiple devices connected to multiple mobile service providers and is hoping that by being the first to offer the new plans he may be able to capture a number of new customers. There is also the possibility of reducing revenues from some existing customers as well, but the added ‘stickiness’ should go a long way in offsetting those short-term effects.
The move into LTE and data buckets is not the only expansion on the horizon for Dodo, which has recently moved into the electricity retail market and will soon launch its gas utility offering, possible in Australia’s unrestricted utilities market place. Kestelman believes that the experience gained in the telco sector had set it up for other industries, particularly in using the fixed broadband and LTE service to provide smart electricity monitoring tools. With this foresight, Dodo may well avoid the extinction of its namesake.
For LTE operators it raises the opportunity for more wholesale customers via the MVNO channel, but does not prevent them from also offering similar ‘data bucket’ plans, as many already do, linked to home broadband offerings. Covering all bases may not be a bad option.

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