Doug Suriano, CTO of Tekelec, discusses tariff innovation and how operators can successfully implement new plans.
Eurocomms.com: How do you think Europe compares to other markets in terms of tariff innovation?
Doug Suriano: It varies by country. Some European mobile operators’ current price plans are quite innovative.
Several Orange properties have offered shared data plans and Swisscom is experimenting with tiers based on data speed, rather than buckets of gigabytes.
In the US on the other hand, Verizon Wireless’ recent launch of its new Share Everything Plans is a game-changer that redefines what a shared data plan can be.
There has been strong innovation in mobile pricing plans in Asia as well.
Smart in the Philippines, for example, recently announced post-paid SIM-only plans based on the length of time a subscriber is online.
The real catalyst to tariff innovation, though, is LTE. We’ll see innovative data plans correlate with the number of LTE networks operators deploy across the region.
Which "new" tariffs do you think European operators should be focusing on delivering and why?
New mobile data tariffs will need to provide more flexibility – that could mean contract length, devices, types of tiers (eg, speed or time instead of data volumes) and partnerships with OTT providers.
Essentially, it’s about operators understanding subscribers and developing new personalised tariffs based on their knowledge of users’ preferences and activities.
An example is knowing which subscribers watch long-form video on tablets and being able to make an attractive offer tailored for them.
The great news is that Europe is inherently a region ripe for tariff testing, due to so many markets, the proliferation of MVNOs and the need for so many subscribers to roam.
Europe also has 38 of the 80 live LTE networks deployed, according to the GSA, giving the region a foundation to create new offers.
What are the usual stumbling blocks for operators who do want to refresh their tariffs?
Operators that want to deliver cutting-edge pricing plans are often at the mercy of inflexible network equipment.
A common example is integrated policy and charging systems that communicate with a proprietary protocol; this inhibits scalability and can make operators dependent on vendor service teams to create new tariffs.
The other obstacle is the sheer volume of Diameter signalling traffic associated with data plan innovation.
Diameter is the signalling protocol that handles all messages for mobility management, policy, charging, authentication and authorisation. New plans that monetise mobile data greatly expand Diameter signalling.
That’s a good thing since new revenues result, but operators need to prepare for unprecedented volumes of Diameter traffic by implementing a Diameter signalling router.
What sorts of tariffs can we expect to see launch in the coming year?
Shared data plans, for one, will continue to expand - Infonetics Research forecasted that the number of mobile broadband devices sold globally on shared data plans will grow from 14.5 million in 2011 to 186.8 million in 2015.
Vodafone Netherlands and Vodafone Spain currently prioritise data traffic for some business subscribers, and we expect that practice to expand in Europe over the next year as well.
Another reality will be “toll-free” data, where application providers cover some or all of the cost of a subscriber’s data usage for a particular application.
Example scenarios include five hours of a streaming music service, a movie preview or the first month of a one-year video subscription service.
We also expect operators will use more sophisticated analytics to create more personalised plans.
Offers customised by device and content will give service providers the ability to target high-value customer segments; with offers that truly meet their needs in ways that competitors could not.