Telcordia: Monetizing mobile data remains a challenge

Operators may be on a slippery slope in terms of profitability if all-you-can-eat mobile data pricing continues without regard for profit margins and the real threat of “over-the-top” (OTT) video and content players, according to a new white paper from Telcordia.

The whitepaper -- “Mobile Broadband: Surf the Broadband Wave with a Customer-Centric Business Model” -- acknowledges that the data average revenue per user (ARPU) has quadrupled over the past six years (now nearly half of voice ARPU), but Telcordia warns that fact distracts from the “serious, long-term challenges,” particularly in terms of the burden on the network.

"Operators should do what they can to become value-added players that capture revenue from OTT personalization services,” said Pat McCarthy, vice president of marketing for service delivery solutions for Telcordia.

For instance, service providers can provide payments as a service, thus allowing users to pay for services and products using their (prepaid or postpaid) mobile phone account. This, the whitepaper says, would be particularly useful in markets where other payment mechanisms (e.g., credit cards and banks) are in short supply or with customers who cannot access them (e.g., teenagers).

The paper also looks at the first-generation of mobile broadband tariffs, which offer little to address the challenge created by peak-hour traffic. Though this is being managed through monthly usage limits for postpaid and daily usage, the whitepaper urges that operators distinguish between different types of traffic and properly prioritize them. It recommends, for example, prioritization of personalized end-user services that generate revenue, while zero-revenue OTT content should be managed with tiered-bandwidth management solutions.

The paper also goes into policy-based bandwidth management and real-time charging as the means for keeping reasonable. The end-goal, according to Telcordia, should be personalization by allowing customers to choose the QoS they want, which has the double benefit of allowing operators to reduce data traffic during peak hours (galvanized by things like discounts if customers choose to download songs and other bandwidth-intensive applications during off-peak periods).

The "Mobile Broadband: Surf the Broadband Wave with a Customer-Centric Business Model" white paper is available at http://www.telcordia.com/library/whitepapers/mobile-broadband.jsp.