Limited Spectrum vs. Unlimited Choice

by John Giere, SVP Products and Marketing

Here at Openwave, we talk a lot about the data tsunami: the growing waves of consumer demand for mobile data services, and the impact this traffic has on our customers’ networks. We started talking and writing about this phenomenon about 18 months ago, before overloaded networks started making headlines, and before the FCC Chairman described the "looming spectrum crisis" last October.

Mobile networks use radio waves to transport data. To support more traffic, more radio spectrum will be needed. The short-term outlook for spectrum availability is fine. Upcoming 4G deployments will provide some relief to the most burdened sections of networks and bring faster transmission speeds to more people. But radio spectrum is limited, a fact that must be accounted for longer term as we become more and more dependent on our anywhere, anytime connection to do more online.

Conserving Natural Resources
It's never too soon to get smarter about how we use our limited resources – be it oil, trees, water or radio waves. Governments can be smarter in how they allocate (and reallocate) spectrum. Mobile service providers can be smarter about how they utilize their available bandwidth. To that end, Openwave has an entire family of products devoted to helping service providers better manage traffic and maximize bandwidth.

I don't think anyone expects consumers to "conserve" bandwidth voluntarily. However, many in the industry (myself included) see service providers turning to innovative pricing models to incent users to conserve. New models will be critical for communication providers to pay for their network upgrades. Flat-rate, "all-you-can-eat" data plans have done their part to spur growth, but I predict that they will become the most expensive option, forcing many consumers to choose from a selection of plans with different data limits and/or varying levels of content optimization (compression).

I am encouraged by the innovative ideas being tested in the market. Of the ones I have heard directly from customers, my favorites are "Data Dating" – plans that allow you and your significant other to receive discount rates on data sent between yourselves; and "Data Happy Hours" – where mobile data rates are significantly discounted during certain periods of the day. To make sure business models continue to evolve, operators need the tools to build flexibility into new service plans. A mechanism for dynamic and real-time feedback from the subscriber bring the user control and transparency that today’s plans lack.

Cap and Choose
The ultimate challenge is getting consumers to change their behavior. Consumers are used to caps on their voice minutes or number of texts, but data plans are less consumer-friendly because they are based on the volume of data consumed (per MB or GB). My internal clock tells me roughly how long I've been talking, but I don't have an internal data meter that tells me how much data I've consumed. This can be a commercial and PR problem when it comes to unpredictable overage and roaming charges.

Mobile subscribers who travel can incur higher roaming charges with both pay-as-you-go and unlimited plans. Browsing the web while outside your coverage area, also known as data roaming is a leading cause of bill shock. If service providers want to truly differentiate themselves with excellent customer service, they need to get creative with their data plans. Like rollover minutes and friends and family plans for voice service, data service plans could benefit from being pegged to users' existing behavior.

And here's where it gets interesting. The technology exists (I know, because we make it) that would allow mobile subscribers to be notified when they are approaching their limit. They can also monitor their own usage (as one would check a fuel gauge). In each case, users nearing their limit could be offered several rate plan options to extend their service. For example, traveling users could purchase a time-based roaming extension (like a day-pass) to avoid bill shock.

In addition to volume- and time-based service plans, service providers can give consumers different qualitative options as well (e.g. gold, silver or bronze service levels). Subscribers could pay less for the same volume limit if they opted for a certain level of content compression and video optimization.

Give Me Options (but not too many)
Choice is like cheesecake, more is good, but too much can slow you down. Mobile service providers have the tools to transform their user data into micro-targeted data plan offerings. A subscriber could be presented with the best three or four options with the ability to customize a plan that suits their usage patterns. Throw in a user-friendly try-before-you-buy system to let users see what bronze-level compression looks like, and you have a flexible, transparent system in place that empowers subscribers to maximize bandwidth. The road ahead is full of innovation; our job is to provide the software tools to create new and compelling rate plans that harness the power of the data tsunami.