Your data consumed will be..

An upselling thought for telcos. Most Telcos provide alerts to customers on data consumption reaching 80% or breaching free allowance. Why not just add a simple logic engine to predict data usage for the month at the end of the 1st and 2nd week? For customers who may exceed free allowance, send a message suggesting the customer to upgrade the data plan. At the end of the 3rd week the same suggestion engine may be used to suggest a top up plan. The end result will be a grateful and probably higher paying customer.

Mobile Data - Your allowance is over

Had been thinking on the preferable operator practices on customer allowance getting exhausted before month end. 

A good parallel would be you driving your car on a highway and run out of fuel with no petrol pump in sight. You had filled in some fuel before embarking on the journey but you did not understand the signs and did not know how long would your journey and so how much fuel was needed. 

Now here's what current operator options would sound like to you:

1) Throttling: We understand that you have run out of fuel . Good news! We have a new technology and you can continue to drive on water for free!! However your car will only move at 5 kmpl. At this point if your end of journey is near you may continue or in most cases just park the car by the road side and ask for a bus. 

  

2) Overage charging: Of course you may continue to drive. Our real time fuelling chopper will reach you in a minute. Just that we will charge you 40 times the normal fuel rates. 

How would you feel about both the options?  For one thing. Most probably you will give up driving !!

Now for a third option. What if at the beginning of the journey you had some body to tell you how much fuel would the journey take. Or if during the journey the were regular signs to tell you how much of the journey is left and you had diesel stations in between to refuel?

I am sure you expect these basics while on every road. Why not expect the same while on the digital highway?

There was a research carried out by Strategy Analytics that data customers prefer alerts with top up options above overage charging or throttling. It is a both a revenue and customer friendly option and it is time operators started implementing the same.

Mobile data pricing is an unenviable job.

Back to my blog after a long time..

Mobile Data consumption has reached a point where operators cannot be profitable at the prices which customers are willing to pay: The average usage on Smartphones is 400-500 MB and for tablets and dongles at 1 GB. In markets like India where overall ARPU is at $2/month it will be foolhardy to expect mass adoption with per GB prices at $7-$8 (3G double offer rates for most operators).
As per an industry report the network opex on delivering data is at $2-$4/GB. Add to that the cost of the exorbitant license fees and it becomes impossible to be affordable on a cost plus basis.
On the other hand Pricing at an affordable level invites results in huge traffic growth that core network expansion becomes necessary every few months.

I am yet to meet some one with a solution. Moving or off-loading traffic to networks with lower cost/GB like LTE or WiFi might be a long term solution but requires significant investment and eco-system development.

Given the nature of the problem significant investment is required in compression techniques on Video and File sharing traffic. You can't have every subscriber downloading 10 MB videos for virtually no cost. That is a recipe for bankcruptcy...