Operators Dress Up Data Caps

DUBLIN -- Management World -- Those users still clinging to unlimited plans in the U.S. will soon be dragged from the all-you-can-eat buffet and moved to a capped plan. That's just another sign that the operators have moved on from how to implement the changes to how to convince their customers the à la carte menu is best, one vendor says.

In an interview here in Dublin, Michael Heffner, director of product management for Tekelec , said large operators used to come to the vendor with operational questions on new pricing models, but they've moved on to explore which new usage-driven pricing plans will work and how they can market them to consumers.

"Marketing teams have significant requirements," Heffner said. "They want to figure out the next differentiated marketing offer and have to drive operations to make sure the platforms can do that."

Both Verizon Wireless and AT&T Inc. (NYSE: T), for example, have discontinued unlimited data, but both also still have a large chunk of their customers "grandfathered" into these plans -- which means existing customers can keep their unlimited plan even though new ones won't be sold.

That's set to change this year. Verizon CFO Fran Shammo said last week that when customers upgrade handsets or renew a contract, they'll be moved off unlimited data plans and on to shared data plans. AT&T is treading more lightly, so far saying it will make data sharing an option, not a requirement. (See Verizon Wireless Brings Unlimited Users to Tiers.)

For both of these operators -- but especially Verizon, given its bold stance -- how to market pricing changes will be especially important as losing unlimited has already made a lot of customers unhappy.

"Everyone is tiptoeing to this. It's a volatile market," added Travis Russell, Tekelec technologist and strategic marketing leader.

As a policy vendor, Tekelec helps make wireless operators such as Verizon aware of the different ways they can price their data plans. Heffner said the vendor comes to operator meetings with a library of dozens of use cases defined. One option, that both Verizon's CTO Tony Melone and John Donovan, senior EVP for technology and network operations at AT&T, have acknowledged looking at is contextual pricing. That approach uses subscriber knowledge to, for example, offer "toll-free" billing when a user enters a building with which the user has a Wi-Fi agreement. (See What We Learned at CTIA and Context Is King.)

It's creepy, both Donovan and the Tekelec men admitted, but it's something policy vendors such as Tekelec can enable as soon as operators figure out how to market it.

"Our job is to enable; it's up to the operator to figure out the morality," Russell said.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

Flook 12/5/2012 | 5:32:29 PM
re: Operators Dress Up Data Caps

I recently spoke with an Israeli network equipment vendor, and I understand that in Israel wireless operators offer unlimited data and voice. And I assume they are making money. Maybe our mobile guys have something to learn from them.

[email protected] 12/5/2012 | 5:27:33 PM
re: Operators Dress Up Data Caps

Verizon is now acting like the goverment.  Told me I get a $50 discount to upgrade my phone and then now they want to hit me with a $30 service charge to upgrade my phone - all in the same transaction.  Oh and my unlimited date plan goes away.  They must think we are really stupid.

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