using lte to boost arpu
Post on 05-Dec-2014
6.363 Views
Preview:
DESCRIPTION
TRANSCRIPT
Using LTE to Boost ARPU
Breakfast BriefingBy Zahid Ghadialy
Managing Director eXplanoTech Ltd.And
Webmaster 3g4g.co.uk, 3g4g.blogspot.com
What is ARPU?
Average Revenue Per User (ARPU) is a measure used primarily by consumer communications and networking companies. It is the total revenue divided by the number of subscribers
Source: Wikipedia
2
Mobile Traffic will keep growing
Source: 3GPP
3
New Sources of Mobile Traffic
Source: 3G Americas
4
Global ARPU Trends
Source: GSMA, Dec. 09
6
‘Dumb Pipes’
� All operators have some kind of flat rate ‘all you can eat’ packages.
� Though most of them put an upper cap or clauses like ‘fair usage’ policy
� These packages have put strain on the network
� The packages are widely abused as well
� A recent report mentioned that 3% of the users generate 40% of the traffic
� Some operators have started fighting back
� Vodafone recently announced that it will charge people for out-of-bundle data.
� AT&T planning to go the Vodafone way as well
‘Smart-Pipes’ and ‘Happy-Pipes’
� Some people now use the term ‘Smart-Pipes’ to emphasise Policy Control, QoS and so forth
� Dean Bubley from Disruptive wireless recently mentioned the word ‘Happy-Pipes’ to emphasise:� There is a huge value in deploying and running a network well
� The smartest networks are the ones which work collaboratively *with* Internet and content companies, not antagonistically against them. This specifically related to areas like policy management.
� There is much under-exploited potential for revenue around wholesale models. There are many potential business opportunities, both for "bulk" wholesale and "slice and dice" methods of deriving extra fees for capacity and value-added services.
More users does not mean more ARPU
� Some operators offer huge rebates to get customers onboard
� Rebates don’t work well in most cases
� They assume, “more users means more ARPU”
� Their simplistic assumption relies on customer loyalty
� Customer loyalty does not exist in this day and age.
Capex/Opex savings via Network Sharing
Example: Two MNOs jointly rolling out an LTE network. Operators jointly roll out a new build of 2500 sites in a developed economy. This will typically achieve a 30% capex saving accumulated over five years and would also reduce opex by 15% per year by year five.
Source: Analysis Mason, May 2010
� Though these savings don’t translate to ARPU, they can certainly reduce the pressure to increase ARPU
LTE Needed for maintaining existing ARPU
� This statement may be too simplistic
So how can LTE help boost ARPU?
Faster and more Reliable Mobile Broadband
� But this may not be enough
Lots of Amazing Applications
� iPhone has more than 185,000+ apps
� More than 4 billion Apps have been downloaded already
� 50,000+ apps available for Android based phones
� Over 100,000 apps downloaded per month
Real Time Mobile Apps
� Live blogging with facility to easily add pictures and videos� Giving rise to m-Reporters and real time citizen journalism
� VoIP based Voice and Video calling and conferencing apps
� Live Radio and TV Streaming
� Real time games
Positioning, Monitoring and Tracking Apps
� Find me or find my friend type applications
� Satnav
� Find the nearest xyz
� Guide me or guide someone
� Track my xyz in real time
16
And you can use these apps to your own advantage ;)
Social Networking Apps
Facebook, Twitter, Linkedin, Orkut, etc.
17
M-Health Apps
� If operators create a complete health based portal, can they charge extra?
� Will users be willing to pay extra for:
� Having a remote nurse available all the time to answer queries
� To have their health checked remotely
� To remind them about taking medicines, etc.
Killer App
�We are still waiting for the killer app
Are Apps the only way to increase ARPU?
Fixed Mobile Convergence
� Triple play
�Quad Play
�Quintuple Play
�Do subscribers become more loyal to operators and give operators the right to charge more?
‘3D’ Mobile
� This is big on device manufacturers agenda.
� There are already plans for:
� 3D movies
� Live games (Football, Soccer, etc.) in 3D
� 3D Videogames
� No one is sure how much bandwidth will a ‘3D’broadcast/streaming hog but few people may pay premium for this service.
22
HD (High Definition)
�HD Voice on mobiles
�HD Video/Movies on mobile
� Blu-Ray for mobiles?
Quality of Service and Quality of Experience
�Are we willing to pay extra to: � Always get connectivity
� Get high speed connectivity even if the network is congested
�Operators can give higher priority to their own/preferred portals� Faster songs download
� Faster movies download
Femtocells
�Are people willing to pay extra for:� Reliable connectivity at home
� High speed data transfer while at home
�Differences with respect to WiFi:� Mobile broadband consumes less power for the Mobile
� The security is far better in Mobile Broadband
Special offers for Premium Subscribers
� O2 in UK has a similar concept called the O2 priority
� Orange in UK gives 2 for 1 for movies on wednesdays.
� Can this concept be enhanced for premium subscribers
Things to think about
Revenue v/s ARPU
�ARPU will only be a useful measure if:� Revenue increases on a regular basis and
� Number of users increase
�Do we focus too much on ARPU?
Do passive ‘data only’ devices reduce ARPU?
�Operators can charge limited fees for data only devices like the e-book readers, mobile Sat-Nav’s, etc.� Should they be included in the calculation of ARPU?
� Do we need a different measure for these devices?
� The operators generally get much higher margin on these with a much lower churn
Some points raised in discussion during the ‘Breakfast Briefing’
Discussion Notes - 1
�Operators have to focus on much more than just voice and video
�Do M2M devices take away the revenue from operator
� Can content providers use the location information for their own advantage � Sending advertisement which are relevant to location information
� What about Spam?
� Are people comfortable disclosing their location?
� Location can be used by employers/partners/stalkers; not acceptable in either case.
Discussion Notes - 2
� LTE can allow people to get rid of their landlines and instead the LTE to WiFi conversion could be used.
� Billing is a very important weapon in the hands of the operator. They can use it to charge for services and content thereby taking a cut. � Users are willing to trust the operator more than 3rd parties for charging them
� The credit card details, etc do not have to be disclosed to others
Credits
� Thanks to the following people who attended the breakfast briefing and making it a lively discussion:� Gunnar Hakansson, Ericsson
� Michael Morash, Bridgewater systems
� Margaret Hu, Huawei
� Umesh Date, Mindtree
� Mehul Patel, Mindtree
� Mohammad Bin Aris, Mobily
� Thanks also to the various contributors at the LTE group on Linkedin who contributed to this discussion out there.
Presented by Zahid Ghadialy© eXplanoTech Ltd.
34
top related