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Moving New Charging Models from Theory to PracticePublished by: Yankee Group Published: Apr. 8, 2009 - 5 Pages Table of Contents
AbstractThe Unfulfilled Promise of Personalized Charging ModelsOne of the most counterproductive traits of the telecommunications service provider community is their slow pace of innovation in constructing new charging models. While the myriad of services offered has expanded in recent years, and consumers continue to derive greater (and more diverse) value from the connectivity operators provide, service plans have remained relatively staid. Flat-rate plans continue to be predominant on the wireline side (with a few notable exceptions), and when operators make alterations to the plans, they focus stridently on tying revenue to bandwidth consumption. This trend has become even more pronounced with the introduction of bandwidth caps from operators becoming increasingly concerned with the oncoming capacity crunch created primarily by video (for further information, see the October 2008 Yankee Group Report “Prepare to Be Capped: The End of Flat-Rate Broadband”). Although this flat-rate pricing construct may make sense from the operator’s point of view, it misrepresents how consumers construe the value that their broadband connection creates. A typical broadband subscriber does not equate “x” amount of bandwidth delivered with “y” amount of value. Rather, the subscriber thinks in terms of the services enabled, applications delivered and content made accessible on his or her particular broadband device. And given that operators generally are not the direct providers of the points of value that consumers pay the most attention to (that role is occupied by players such as Google, eBay, Apple and RIM), service providers must reposition themselves. Their value is not in being a provider of bandwidth; it is in being an enabler of services. Hence, charging models must be constructed with this value proposition in mind. To maximize the revenue opportunity, operators need to personalize their service plans around specific consumer activities and behaviors such as video sharing, online gaming or live content streaming, not around blind bandwidth levels. Get Full Details About This Report >> |
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