Snipping off the scissor effect

Melissa Chua
12 Apr 2011

The threat a scissor effect in coming years, where mobile network costs outstrip data revenue, has led telecom executives at Mobile Broadband Asia 2011 to explore new methods of managing costs.

“Unlimited flat rate data has sped up internet adoption, but is not a sustainable model, especially where resources are limited,” said Herman Hermanudin, Indosat’s general manager of business development.

Indosat has implemented several methods to better manage network traffic and increase data ARPU.

These methods include a ‘turbo-speed’ feature, where flat rate customers buy an additional top-up voucher on top of their monthly bill to get higher access speeds; a lower priced off-peak hour package and a soft-caps policy, where access speeds would be lowered for flat rate customers who use more than a prescribed amount of data.

Customers subscribed to the off-peak package would also be subjected to the soft-cap approach should they log on outside of the stipulated 0000 to 0600 period, said Hermanudin.

“The only solution is investment in the network or offloading technologies,” said Hermanudin.

Vodafone Hutchison Australia’s search for the most efficient way to curb the scissor effect resulted in three possible profitability models – capacity driven investment, with continued HSPA+ investments and upgrades to full IP networks; investment in new technologies such as QoS or LTE and femtocell hotspots, or an overall focus on deploying LTE through metro and suburban areas with differentiated prices and LTE-based products and services.

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