Rebalancing Tariffs: Improving Data ROI and Transition to Telco 2.0+
2017.05.02   |   38 pages   |   Operations and Management

Author:
Jon Newman


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MNOs face issues arising from a disproportionate reliance on voice revenues within their income stream.  Voice revenues are falling and will continue to do so, maybe even trending towards zero over time.  These revenues cannot be replaced by data charges with tariff packages as currently configured by most network operators.

The challenge is to transition the base to data-centric tariffs without losing the legacy revenue stream, so that the capital expenditure required for new network generations can be justified.  The alternative is a gradual decline in the relevance of MNOs in the digital market.

Beyond this, if MNOs are to retain a value-added role, they need to redefine themselves, moving from primarily being communications companies to an essential element in the digital landscape doing more than providing basic connectivity – moving beyond Telco 2.0.

This report examines the potential evolution of the market and compares analysis of the potential roles MNOs may fulfil in the future.  It also provides examples of MNOs that have already moved from voice-first to data-centric pricing and the impact this has had on their business.  The report concludes with Mobile Market Development’s recommendations to MNOs that will assist in transition.

 

Companies: GSMA, Analysys Mason, Pyramid, BT, Deutsche Telekom, Ericsson, Orange, KPN, Tele2, Vodafone, A. T. Kearney, 451 Research, Smart, Globe, Econet, Reliance Jio, Reliance Communications, Idea, MTS, Bharti Airtel, Telenor, Comviq, SK Telecom, Bain & Company

Countries: Europe, Ireland, Philippines, Zimbabwe, India, Sweden, South Korea

Keywords: multi-play, EBITDA, bundle, tariff, broadband, consumer, Capex, content, VoIP, connectivity, manifesto, walled garden, commoditising, consolidation, circuit-switched, bandwidth, hybrid, partnership, unlimited voice, voice-centric, regulators, M2M, data utility, differentiation, CoIP, prepay, spectrum, Mobile data, 3G, digital navigator, GPRS, data-centric, VoLTE, 5G, 4G, monetization, rebalancing, ARPU, postpay,

1

Overview

1

2

Introduction

2

2.1

Background to the Report

2

2.2

Report Content

2

2.3

Currency and Conversions

3

2.4

Further Questions and Feedback

3

3

Tariff Rebalancing – Need and Prospects

4

3.1

An Evolving Environment

4

3.2

Potential Options for MNOs

6

3.2.1

Prepay/Postpay Convergence

6

3.2.2

New Roles for Operators

6

4

Examples

10

4.1

Developing Markets

10

4.1.1

Introduction

10

4.1.2

Obstacles to Rebalancing

10

4.1.3

Disruptive Data-first Market Entry by Reliance Jio in India

12

4.1.3.1

Background and Tariffs

12

4.1.3.2

Impact and Conclusions

15

4.2

Developed Markets

17

4.2.1

Introduction

17

4.2.2

Vodafone RED

17

4.2.2.1

History of Tariff

17

4.2.2.2

Impact and Conclusions

20

4.2.3

Tele2

22

4.2.3.1

Background

22

4.2.3.2

Tele2 in Sweden

23

4.2.3.3

Tele2 Price Plans in Sweden

24

4.2.3.4

Impact and Conclusions

28

4.2.4

SK Telecom

29

4.2.4.1

Background

29

4.2.4.2

SK Telecom Data-centric Tariffs

31

4.2.4.3

Impact and Conclusions

33

5

Conclusions

34

6

Recommendations

37

 

Appendix 1 – Feedback Questions

39

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