Unlimited data plans can improve profitability for mobile operators

Unlimited data plans can improve profitability for mobile operators

Market news |
By Wisse Hettinga

Citing examples from Finland, South Korea, US and China, as well as offerings from Vodafone and Deutsche Telekom, Strategy Analytics builds the case for more operators to launch unlimited data plans supported by LTE-A, LTE-A Pro and unlicensed LTE, including Licensed Assisted Access LTE (LAA) upgrades.

Key findings from the report are:

  • Three markets have seen positive trends in operator profitability even as the markets moved to favor unlimited data plans: Finland, South Korea, and the US. It is important to note that the revenue growth unlocked by operators in these markets has also been achieved with stable or improving EBITDA margins.
  • Quality of experience is as important as pricing in driving up usage and value. Building the network capacity and performance to deliver a better customer experience while growing traffic is essential.
  • Service plan innovations are key to promote network strength and market perception of that strength as new flagship smartphones that support Gigabit LTE are coming to market.

Susan Welsh de Grimaldo, Director, Service Provider Strategies, recommends: “Momentum is building behind unlimited data plans. For operators considering this path, there is a critical need to implement LTE-A, LTE-A Pro and unlicensed LTE features in their network and handset portfolio to cost effectively deliver greater user experience and drive customer value for content rich use cases.”

Phil Kendall, Executive Director, Service Provider Strategies, commented: “There are many challenges for operators in how to differentiate and monetize value propositions in an unlimited plan environment, while staying on the right side of net neutrality legislation. What we have seen in South Korea and Finland, in particular, are that approaches to drive up usage with unlimited or zero-rated plans do not have to be a race to the bottom.”

Complimentary copy of the report:

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