Camiant Reveals Mobile Broadband Research Findings

Camiant has revealed the findings of its latest study, Rethinking Mobile Broadband Data Rate Plans. The study finds that by redesigning mobile broadband data rate plans, operators will be able to help solve one of the industrys most pressing concerns, which Camiant dubs the bandwidth-value gap, and defines as the growing disconnect between bandwidth demand and revenue growth.
Camiant notes that, according to estimates from research firm Heavy Reading, bandwidth on 3G mobile networks is growing by approximately 400% annually, while the associated revenue from data services is growing by approximately 40% per year. Camiants study reveals that mobile data consumers are more interested in rate plans designed to control bandwidth and that afford incremental revenue add-ons than they are in traditional Cap + Overage rate plans, with strict usage caps and steep overage penalties.
The study was commissioned by Camiant and conducted by Heavy Reading in September and October 2009. 263 mobile broadband dongle users throughout Europe, including the UK, France, Germany, Italy, Spain and Sweden were polled regarding their preferences for various forms of rate plans. 
Key findings among consumers with Cap + Overage-style rate plans include:

  • 62% didnt know what their usage cap was
  • 76% didnt know how much bandwidth they actually used
  • 39% didnt know what happened if they went over the usage cap
  • 45% were very/moderately concerned about exceeding the cap

When presented with four alternative rate plan structures and asked for their preference, Cap + Overage was least preferred by consumers. A plan that includes the same base package, charging the same effective rate for overage with the understanding that service speed would be low for any data over the monthly limit during peak hours, generated more than twice the interest level:
The preferences were as follows:

  • 20 (18) for 3GB + 20/GB overage: 16%
  • 20 for 3GB + 7/GB overage + peak bandwidth limit: 35%
  • 20 for unlimited low-speed service: 23%
  • 50 for unlimited high speed service: 26%

The research also reveals that many users were willing to pay additional fees beyond the base subscription for potential extras. 43% of all respondents would pay 5 in addition to base plan for unlimited usage of one specific application. Of those that were interested, 90% said it was important that they select the application. 45% of respondents interested in a service that might provide lower speed at some point said they would be willing to pay between 1 and 3 for on-demand higher speed for a short duration (e.g. 1 hour).
The prospect that network growth could consume revenue faster than operators can generate it marks a new phase in the industrys maturation, says Randy Fuller, Vice President of Business Development at Camiant. Our study clearly indicates that there are definite opportunities for mobile operators to use rate plan structures to help solve this problem and that users are receptive to creative alternatives. 
By rethinking mobile data rate plans, says Camiant, operators can enable users to make value decisions based more in line with operator cost, as well as directly address peak bandwidth utilization and the true cost of marginal network growth. Also, since operators can offer variable and ARPU-expanding options in search of market share growth rather than simple discounts, the potential occurrence of a profit-destroying price war should be reduced.
Its becoming very clear that network operators need to offer a wider range of package options to users of mobile data users, says Graham Finnie, Chief Analyst at Heavy Reading. This study provides strong evidence that end users are willing to consider a range of alternatives to conventional usage management schemes.