Service plans to evolve with increasing Web-connected devices

With multi-device ownership increasing as demand for wider Web connectivity grows, mobile broadband users now have to juggle several data plans. But this may change in future as telcos evolve their billing model, say analysts.
Written by Liau Yun Qing, Contributor

As more 3G-enabled devices enter the market, mobile users looking to own Web-connected devices are strapped with multiple data plans due to the way service providers currently charge. However, this may change in the future when telcos evolve to provide a universal data plan or more flexible mobile plans that can be shared by many devices, industry analysts note.

In a phone interview with ZDNet Asia, Craig Skinner, senior consultant at Ovum, said most telcos today assign a standalone data plan that is tied to a SIM card for each subsidized 3G-enabled device. Even for unsubsidized devices, most operators currently tag smartphones and tablets with different data plans, he said.

Skinner pointed to telcos' wish to protect their voice service revenues as a reason for separating smartphone and tablet with service plans. However, he said, this would change in the future.

Moving forward, the Ovum analyst explained that data and voice charges will reach a point where price plans for both will be similar. It will then be easier for telcos to provide a universal data plan, he said.

This could happen in six months or a few years' time, he noted. However, before telcos evolve to this charging model, they will first need to begin consolidating their customers' multiple data plans into a single bill, he said.

This will allow users to make only one payment per month since the system will be able to pull data from different data plans into a single bill, he added. With a single bill payment, telcos can also attract customers by providing loyalty discounts to those who subscribe multiple services, he noted.

Chua Swee Kiat, spokesperson for Singapore mobile operator, M1, told ZDNet Asia in an e-mail interview that the company offers loyalty discounts in the form of the multiple-line saver plans. M1 customers receive a 25 percent discount in their monthly subscription plans if they subscribe to three M1 phone lines, 30 percent discount for four lines and 35 percent discount for five lines, Chua said.

He added that the mobile operator offers a multi-SIM service where customers can tag one mobile number to multiple SIM cards, up to three, for three different devices such as smartphones and BlackBerry devices.

Skinner noted that providing a single bill for multiple service plans is a "first step" for telcos, after which they should look at providing a universal data plan for multiple devices. He explained that many companies do not have such services yet as it will take some time for telcos to develop the IT capability to dynamically manage data usage.

According to reports, Toronto-based operator Rogers Communications already allows its customers to link multiple devices to a single data plan.

According to the company' Web site, customers can link their devices to one service plan at a monthly charge of 15 to 20 Canadian dollars (US$14.9 to US$19.9). Rogers Communications' voice and data plans start from 55 Canadian dollars (US$54.7).

Metered billing more suitable
One analyst believes that while some customers may prefer a universal data plan, subsidized devices remain more attractive to others.

In an e-mail interview with ZDNet Asia, ABI Research's senior analyst Mark Beccue said subsidized devices have a strong appeal and customers may not be willing to give up the cost savings for the simplicity of a universal data plan.

Thus, mobile operators that are able to provide a broad portfolio of subsidized devices as well as a universal data plan will resonate with users, Beccue said.

That said, the analyst believes metered, pay-as-you-go billing may suit a significant portion of consumers.

"For example, it is possible that a carrier can offer a plan that detects when a subscriber is in an underutilized cell site, and offer discounted pricing for a limited time [to entice the user] to use the device while the consumer is in that location," he explained. "Or, there can be a service plan in which the subscriber has the capability to toggle data speed in real-time, with cheaper pricing for slower speeds and higher pricing for faster speed."

These scenarios are possible for mobile operators that have IP Multimedia Subsystem (IMS) networks with centralized subscriber databases, sophisticated policy management infrastructure and advanced billing systems, he said.

According to Marc Einstein, Asia-Pacific industry manager for ICT practice at Frost & Sullivan, there is a short-term solution for users looking to reduce their number of data plans but whose mobile operator do not offer a universal data plan or pay-as-you-go billing models. They can use a Mi-Fi device to turn their 3G connection into a mobile Wi-Fi hotspot, which can then be used to provide wireless access to multiple devices, Einstein said.

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