Data surge fuels shift in pricing

Michael Carroll
13 Sep 2011

Mobile operators are responding to a 77% rise in average mobile bandwidth consumption during the first half with a range of innovative pricing models. Cities in Asia Pacific are fueling the growth due to typically higher data rates.

More than half of global mobile operators have now ditched all-you-can eat price plans, as they begin to respond to the challenge of surging demand for data services.

Some 51% of operators surveyed by network optimization firm Allot Communications reported they don't offer unlimited tariffs, with many switching instead to application-aware or volume-based pricing models. They're responding to soaring demand for mobile bandwidth, fuelled by video, VoIP and file sharing services.

The majority of operators have adopted volume based charging, typically in conjunction with a capped tariff. By end June, 89% of carriers on Allot's books had deployed the model, with 32% using application-aware models including free access to social media, and ad-sponsored apps.

Allot's regular web metrics - taken from carriers with a combined subscriber base of 250 million - reveal that mobile bandwidth consumption soared by an average of 77% in 1H11, compared with 25% growth in fixed usage. Demand for video is fueling the mobile figure, growing 93% during the period to account for 39% of all consumption alone.

Rami Hadar, Allot's president and chief, notes that over-the-top applications like Google's YouTube are challenging operators. The video site consumed 52% of global mobile video streaming bandwidth in the first half, 11% of which was high-definition content. "We are seeing operators taking the opportunity to evolve their service plans, away from 'unlimited' and toward application-aware models in order to meet this challenge," Hadar commented.

He believes HD video offers as big an opportunity as it does a threat to wireless operators. On the one hand, the high-bandwidth content presents challenges in terms of maintaining the user experience, but the flip side is fresh opportunities to monetize the content. The optimization firm notes carriers can deploy new premium service packages for HD content, or adopt revenue sharing models that will help bring OTT players into the value stream.

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