Norwegian software developer Opera Software on Friday introduced a new spin on the sponsored data model, giving operators a way of subsidising the cost of content delivery.
Sponsored Web Pass capitalises on Opera’s control of the browser on over 200 million devices worldwide, inserting an advertisement from a sponsor before allowing users to continue to certain content or a data allowance.
By way of example, a user can get “one day of mobile internet”, or “one hour of Twitter usage” sponsored by an advertiser, Opera said.
When the Sponsored Web Pass expires, users are given the option to continue browsing after purchasing a paid Web Pass, or to re-engage with different sponsors and continue browsing at no charge.
“Sponsored Web Pass gives operators a unique channel to partner with the advertisers and content providers who are already driving traffic across their networks, and helps both parties to participate in monetization of that traffic,” said Nuno Sitima, SVP of Business Development at Opera Software. “This is an excellent way for operators to bring new users onto the mobile internet while introducing them to new, easy-to-understand data packages.”
It was AT&T that recently made the industry’s first move on a sponsored data service, with an offering for advertisers that allows businesses to cover the transmission cost of content they provide to consumers.
The Sponsored Data service enables customers to view sponsored content and use apps over AT&T’s HSPA+ and LTE networks without that data usage coming out of their monthly wireless data plan.
A US start-up backed by Skype co-founder Niklas Zennstrom and his venture capital firm Atomico is aiming to disrupt the wireless broadband market with a commitment to deliver free high speed data services to its users. FreedomPop has launched the beta version of its service and will be offering 500MB of free data usage to each of its customers using US wholesale operator Clearwire’s WiMAX network.
The firm will sell excess data beyond the initial 500MB at $ 0.01 per MB. Users will be able to trade unused data capacities with each other on a social network. FreedomPop said that it aims to switch the service onto Sprint’s LTE spectrum sometime in early 2013.
Similar free or low-cost services have been launched in Europe in recent months. In the UK, MVNO Samba Mobile launched a service that offers free mobile data in return for viewing adverts.
In France, low-cost 3G operator Free managed to acquire nearly four per cent of the country’s market share in just 80 days by offering low-cost commercial mobile plans such as its €2 per month no-contract offering for 60 minutes voice and 60 SMS per month.
In terms of the benefits Big Data could bring to operators, respondents to the Telecoms.com Intelligence Annual Industry Survey identified customer retention and segmentation/targeting as the clear leaders. Survey respondents were asked to rank a number of potential benefits on a scale of one to seven where seven represented very high potential benefit. Almost 60 per cent of operators and 55 per cent of respondents overall ranked customer retention as six or seven on this scale, with segmentation/targeting drawing the same response from 52.3 per cent of respondents. And so it follows that upselling and internal promotions were seen as the third most beneficial application of Big Data by operator respondents, with 47.3 per cent giving this a high rating.
By using big data to optimise their own processes and improve quality of service, operators will already be building a platform that could enable them to explore new business opportunities. But it was interesting to note that, despite more interest in Big Data as a driver of external revenues than internal improvements, third party advertising and marketing were seen as having the least potential out of all the options in this section. Just 31.2 per cent of operator respondents gave this a high rating for potential. This is perhaps a reflection on the more cautious attitude of the business world at large in the wake of several privacy scandals during 2013 and the effects of the NSA PRISM revelations.
The application of Big Data for network planning and optimisation was also seen as a key initiative, given a high ranking by 49 per cent of respondents overall and 46.9 per cent of operators. This echoes discussions that we had with industry over 2013, in which some players suggested that network complexity rather than bandwidth might fast be becoming the barrier to network growth.
Operators should be looking to spend ten to 20 per cent of their annual IT budget on Big Data in 2014, according to respondents. According to operator respondents, which closely matched the wider industry view, 36 per cent would allocate up to ten per cent of their IT budget in 2014 and 37 per cent would allocate up to 20 per cent for Big Data initiatives.
There was a significant drop in users expecting to spend more than 20 per cent of the year’s IT budget, with only half as many again looking to spend between 20 and 30 per cent of budget on Big Data and less than ten per cent looking to spend more than 30 per cent.
The 2014 Telecoms.com Intelligence Global Industry Survey drew responses from more than 2,000 industry professionals, including more than 700 operator representatives. The full report from the survey will be made available in mid-February. You can register to receive the report here.
Hugh S Bradlow, CTO, Telstra is speaking on the smart home revolution on Day Three of the Broadband World Forum 2012, taking place on the 16 – 18 October 2012 at the RAI Exhibition and Convention Centre, Amsterdam, the Netherlands. Ahead of the show we speak with him about his views on traffic management and where carriers can add value for consumers.
What were the big milestones for Telstra in the last 12 months?
Last month we announced a dramatic expansion of our 4G service in Australia. Encouraged by reaching over 500,000 4G customers in less than 12 months, we are now set to more than double our 4G coverage area in Sydney, Melbourne, Brisbane, Adelaide and Perth, extending to approximately two-thirds of the population within the next ten months.
Where do you stand on bandwidth caps, line throttling and traffic management?
Usage caps have been part of the Australian internet scene since the beginning. Economist J.K. Galbraith once described Australia as the “biggest mistake in position God ever made”, so access to the internet in the early days was constrained by the cost of the overseas links, hence the introduction of usage caps. When users exceed their usage cap on fixed broadband, we may throttle their lines down to dial up speeds. This helps to avoid bill shock and is good usage management practice. We do not currently implement traffic management. However, these practices are increasingly being used by ISPs outside Australia to ensure fair usage of internet resources amongst users.
There is often criticism that ISP and governments are not rolling out networks that are fast enough – but we also hear that few customers are yet paying for higher speeds? Why is there such a disconnect?
Users perceive the value that the applications and services deliver to them. As long as the network does not inhibit the performance or reliability of those applications, they do not perceive the value in the network. It is only when the applications exceed the capability of the network that they see the value in upgrading.
Many see OTT services as a major threat? Do you?
We see OTT services as part of a suite of functionality that delivers value to our customers. As such, we try and ensure that our customers can get access to the services that they desire and require and facilitate this where possible.
Where can the carriers add value for the customer?
The business of carriers is to be service providers—we connect customers to the technology solutions that they want to use. We can add value by creating reliable, consistent, low latency, high throughput network services, by helping customers restore services in the event of inevitable failures and providing them with support through stores, contact centres and online channels and by offering them additional functions and features such as video conferencing services.
Could 4G services affect the demand for superfast fixed line broadband?
Telstra has long said that we view fixed and mobile broadband as complimentary services. There will be a degree of substitution between fixed and mobile services, however, even high speed wireless technologies are a shared access medium and thus less suited than fixed broadband to delivering media-centric services such as high definition video on demand. I believe there will continue to be strong demand for fixed broadband services as the importance of video services continues to grow.
Net neutrality has been enshrined in law in the Netherlands. What’s your stance on this?
My stance is that rigid rules dictating how technically complex systems such as networks, particularly mobile ones, operate would stifle innovation and reduce competition. As long as ISPs are clear and transparent about the way their networks operate, consumers should be allowed to choose the service that best suits their individual needs.
Is there enough innovation in the industry? If so, can you provide examples?
The telco industry by its nature is about making big capital bets so you cannot afford big risks. However, there is plenty of innovation in the industry. To cite a Telstra example, in 2006 we launched our Next G network. At the time we chose to launch WCDMA at 850MHz in order to make our 3G network our coverage network. This was seen as radically different from previous 3G launches where the 2G network remained the coverage network. However, as a result we cover in excess of 99 pre cent of Australia’s population with a 3G network that now has HSPA across the entire network and is more than three times larger in terms of coverage area than our 2G network.
What are the major challenges that you expect to face in the next few years?
I think that everyone in the industry recognises that the biggest challenge is supporting the massive growth in data demand cost effectively. However, I believe that there are some additional challenges: on the mobile side, battery life is becoming a bug bear for many devices, particularly smartphones; network consistency—by which I mean coverage and capacity as well as reliability i.e. the ability to be sure that you will get the network service you need when you need it—is going to be vital, as services increasingly become cloud based. For full service operators such as us, the ability to deliver value to our customers in terms of services and features is also critical.
What are you hoping to get out of attending the Broadband World Forum 2012?
The Broadband World Forum is one of the events on the global calendar where you get a gathering of the whole industry. It is a chance to hear what others are doing, garner ideas for innovation and to meet industry colleagues and share ideas and experiences.
Chief Innovation Officer, Lycamobile: “Development of key applications such as WhatsApp and VoLTE already driving data usage”
Lycamobile is an MVNO that is really going places. Its customers certainly are – all over the world in fact, with the company offering low cost calls in Europe, Asia and now the US. 2014 is certainly set to be a big year for it. Ahead of the 4th annual LTE MENA conference, taking place on the 11th-13th May 2014 at the Conrad, Dubai, UAE, we speak to Vishwanath Madhugiri, Chief Innovation Officer who is speaking on the subject of innovative services as revenue stream for operators on Day One of the LTE MENA conference. Madhugiri explains how even though data usage however is only at a nascent stage. working with Lycamobile gives MNOs access to customers in ethnic communities for which they would otherwise not be able to cater.
Please tell me more about Lycamobile and what makes it unique?
Founded in 2006, Lycamobile is the solution for those who want to connect back home. Currently providing low-cost high-quality international calls to over 30 million customers across 17 countries, Lycamobile’s sheer span, sharp focus on customer service and innovative business model has seen us outgrow our competition; achieving greater coverage of the European population than any other network operator. A Mobile Virtual Network Operator initially developed for the expatriate communities in Europe; Lycamobile has fast become a global brand synonymous with connecting customers with their loved ones across oceans, borders and networks at the cheapest possible price. This is what makes us unique.
You’ve recently launched as an MVNO in Italy? Why did you take this step and do you have plans to extend this to other locations?
In the seven years since the business was founded, our objective and strategy has been to become the largest low-cost international call provider by geography in the world. Over the past 18 months we have invested heavily in expanding our geographical coverage. Italy happens to be our latest launch as a full MVNO. The addition of Germany to our portfolio in 2012 ensured that we have greater coverage of the European market than any other mobile operator. A subsequent move into Ireland and Portugal served to embed our footprint across Europe and extend the service to over 80 per cent of the EU population. Perhaps most significantly, 2013 saw us activate our biggest market launch to date: introducing the service to the US with the promise to bring an unparalleled level of cost and quality of service to American consumers. Set to double our business revenue over the next financial year, Lycamobile USA launched in March as the country’s first full MVNO, operational in 18 states with plans to expand this to 25 states in 18 months. We are now the largest low-cost international call provider by geography in the world. We have identified eight further territories in which we would like to be operating by February 2014 to include Canada and markets in Latin America and Asia. A 5,000 strong global team in February 2013 celebrated reaching the target of €1 billion turnover for 2012/2013. We fully expect these plans to give rise to the doubling of this figure by year end 2014.
You’ve been based primarily around voice rather than data – where does LTE/4G fit into your strategy?
The primary business focus of Lycamobile in all the countries that we operate in is ethnic communities making and receiving International telephone calls. Voice accounts for almost 90 per cent of the Lycamobile mobile traffic presently. However Lycamobile foresees the focus changing rapidly in the next few years driven by more affordable data pricing, faster data-access speeds and the availability of data focused devises. Development of key user-friendly applications such as WhatsApp and VoLTE are already driving data usage growth in the Lycamobile communities and in line with this, the Lycamobile R&D teams have already developed apps to enhance the data-usage experience of the Lycamobile customer. The Lycamobile network, in line with all the other major mobile networks in Europe and the rest of the world is LTE enabled and ready to embrace this exciting new technology.
How can working with you benefit operators?
Lycamobile specialises in addressing ethnic communities and other groups that have specific niche, individual and unique requirements. Many of these communities and groups fall outside the standard marketing focus of the traditional MNOs, making any business that the communities and groups might bring to the MNOs erratic, unsustainable and with high churn rates. Lycamobile, through our enhanced community programs and marketing expertise are able to offer services tailored to fit the communities’ and groups’ specific needs.
The benefit to the MNO is threefold:
1. The MNO gains the ethnic customers that it could not have reached on its network.
2. Lycamobile effectively converts a lumpy and erratic retail revenue stream into a committed wholesale revenue
3. Lycamobile accepts all the risks associated with this churn, thereby reducing the churn KPIs of the host MNO
How will the EU move to eliminate roaming charges impact your future direction?
Lycamobile generates a large amount of traffic that includes roaming traffic in and out of all the 17 countries in which we currently operate. As a key player and the largest ethnic MVNO in a majority of these countries, Lycamobile has a sound strategy with which to factor in these changes. We respect the regulatory environment and fully embrace changes aimed at reducing prices and therefore benefiting our customers.
Why is the LTE MENA conference an important date in your diary?
We are observing exponential innovation and growth in the mobile broadband wireless industry, and LTE MENA is the most important dedicated LTE event in the Middle East. With Lycamobile being a global MVNO and with my background in interdisciplinary innovation across industries, this is a crucial industry forum to showcase Lycamobile’s achievements, to network with industry peers and important stakeholders and to absorb the latest trends.
Over 200 mobile operators surveyed: Almost 90% believe the availability of real-time data in their post paid billing systems is essential to future data charging models but only 22% have the capability today.
Telecoms.com Intelligence carried out research to examine how mobile data billing needs to change in the next 24 months. With responses from over 200 mobile operators, this research paper gives a detailed insight into:
- How new data pricing, packaging and business models will require traditional post-paid billing systems to support real-time data
- The services that operators are going to roll-out that need real-time billing data
- The charging models that real-time data and new network controls will enable operators to bring to market.
Please complete the short form below to download this free report produced by Telecoms.com Intelligence in association with Openet.