Tuesday, April 6, 2010

Telcordia Warns of "All-You-Can-Eat" Mobile Data Plans

Mobile operators face an unsustainable long-term financial challenge with all-you-can eat mobile data pricing when you combine it with third-party "over-the-top" (OTT) video and content services, according to a new study published by Telcordia.

The warning comes despite the fact that data ARPU has increased steadily over the past several years and is now a major component of the growth strategy for mobile operators.

The traffic growth on these networks, however, significantly outpaces the revenue growth.

"The popularity of video and other third-party OTT services are breaking mobile broadband networks and business models because they siphon off revenue while adding to the network's workload," said Pat McCarthy, Vice President, Marketing, Service Delivery Solutions, Telcordia. "Operators should use this problem as an opportunity to transform themselves from dumb pipes into value-added players that capture revenue from OTT personalization services."

Telcordia is recommending policy-based bandwidth management and real-time charging solutions to give priority access to personalized end user services that generate revenue for an operator, while zero-revenue OTT content is managed at a lower tier.

The "Mobile Broadband: Surf the Broadband Wave with a Customer-Centric Business Model" white paper is posted on the company's website.