With many Operators offering Tiered Pricing mobile data plans, some operators are also mandating that users subscribe to a mobile data plan for any new smartphone purchases. In some cases, families are resisting the costs of “per subscriber” data plans, and are deferring smartphone upgrades. This trend could slow operators’ mobile data revenue momentum. Operators are considering a new type of "family plan," a mobile data-service plan that covers multiple users’ devices, allowing the subscriber to purchase a single bucket of bytes for sharing among family members. Similarly, these plans are of interest to other value-conscious groups such as Small-to-Medium Businesses (SMB). Let’s call this the Family/Group Data Plan.
A variant of that plan involves grouping devices rather than grouping users, i.e., a user with multiple devices (e.g., smartphone + tablet) could have a single contract with a shared data quota across devices. While similar in some sense to the Family/Group Data Plan, let’s refer to this variant as a Multi-Device Plan. These 2 types of plans are likely to be offered in mixed combinations as they become more prominent in the market.
Operators Like Family Values
In a custom Cisco-commissioned Heavy Reading study, based on a global survey of 50 operators, there were interesting operator perspectives on Monetization, Optimization, and Video services. In this research, Operators viewed Family/Group Data plans as the second most favored monetization use case, in part because it will help operators drive incremental data penetration and usage. A Family/Group Data Plan is viewed as a lower cost way for new subscribers to come onto the network, and a good value service that will encourage loyalty and differentiation. This is the use-case that respondents thought the most likely to achieve greater than 30% penetration, and that operators think has the best revenue potential, with 36% saying it could generate $5 ARPU per month. The plan was also viewed as easily understandable – important for pushing mobile broadband into the mass market. A group of 19 respondents from North America and Western Europe with revenue greater than $200 million were more enthusiastic than average about this use-case, with 45% of them selecting a “more than 30%” penetration rate for this service. In emerging markets, there was also strong interest in this offer because it had the ability to attract multiple customers in one contract. Some mobile operators also believe that Family/Group Plans would add interest in new LTE offerings and even help capture customers from the residential DSL market.
Some operator Family/Group Plan examples: 3 Austria launched its 3PartnerCard which, for €3 per month, gives mobile data subscribers a second USB data modem that can share the data quota of their primary data stick. 3 Austria also offers 3 Data Pool which enables a corporate customer to subscribe to a common pool of mobile data quota, from 3GB to 50GB/month, that can be used individually by company employees. Rogers in Canada offers voice & data Family plans with either 1GB or 2GB shared data quotas, including unlimited Social Networking usage. AT&T recently hinted that it's working on Family Plan offers, and Verizon Wireless disclosed that it too will introduce family data plans after it launches tiered data pricing, likely sometime in the summer. [March 2013 update: in addition to Family Data plans now offered by AT&T, Verizon Wireless and others, TeliaSonera launched shared mobile data plan in Sweden, allowing up to seven devices via a single subscription]
Family Data Plans can also have a parental control feature if the operator gives parents the ability to dynamically manage and allocate a shared data quota across family members. For example, a parent might block mobile gaming services for a period of time for a child who isn’t doing well in school, so that there is less distraction. The same capabilities can enhance “group” plans sold to businesses, where there may be different categories of employees who could be permitted different mobile data service privileges.
These plans enable the operator’s customers to share their data quota across more than 1 device. While the predominant approach is for operators to offer subscribers separate mobile data plans for each device, there is growing recognition for the need of multi-device mobile data plans, especially as tablets, e-book readers, etc. are often considered as secondary devices by users. And as these secondary devices typically support Wi-Fi connections, many users will forgo the cost of subscribing to a separate 3G or LTE data contract. Some analysts project that Apple is producing the iPad2 in a ratio of 3:4:3 (Wi-Fi, UMTS, and CDMA/EV-DO, respectively), suggesting that the majority of iPad2 shipments are 3G models. [Update: analyst firm ABI Research reported that only 25% of the Apple iPad tablets shipped in Q1 2011 featured support for 3G networks.] That number is significantly lower from previous quarters and just below the industry average of around 35 percent. It may be that once the early adopter segment is exhausted, operators will have to more seriously consider Multi-Device Plans to continue a high 3G or LTE service attachment rate for tablet sales. And as tablets generate 5 times more traffic than the average smartphone (see Cisco’s Visual Networking Index (VNI) Global Mobile Data Traffic Forecast), operators will want to monetize their data usage. Operators also view the enterprise market as a segment where there will be demand for Multi-Device Plans, e.g., 3G iPad and Android tablet users wanting to add the device to their corporate smartphone accounts.
Multi-Device Plans are now appearing from some operators, e.g., for an additional €3 per month, Movistar Spain’s iPhone Plus or Premium subscribers can get a 2nd SIM for an iPad sharing the same mobile data quota. Mobistar in Belgium launched Internet Everywhere Multi, a contract which allows sharing the same data bundle across several mobile devices. Such Multi-Device offers are also logically consistent with the direction that multimedia content providers are heading in offering “any screen” access to users’ preferred services, especially premium video content. Many operators are investing in the intelligent mobile/evolved packet core and Policy and Charging Control (PCC) solutions necessary to deploy new mobile broadband services like Family/Group Plan and Multi-Device Plans.
This “Any Screen” trend leads to an interesting question: will the ability of the operator’s intelligent network to manage a user’s data quota across multiple devices – possibly along with the capability to optimize formatting and display of such content – provide additional opportunities for operators to forge partnerships with content providers?
See the Mobile Internet Monetization Showcase for case studies, data sheets, and other information on a wide range of revenue-generating "Use Cases" that operators can offer.
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