IIR MOBILE INTERNET CONFERENCE: Operators Reveal Flat Rate Impact on Internet Usage & Behavior; It Drives ARPU To New Heights, But Should We Call It The “Mobile Internet” Moving Forward?
In-Brief: A summary report from IIR’s recent Mobile Internet Conference held in Berlin yields important insights into how the market is likely to shape up (and shake-out) as users flock to take advantage of new flat rate data packages. Some stats to consider: TeliaSonera reports a whopping 700 percent (!) increase in data revenue growth in 2007 with mobile content accounting for roughly one-third of the total. Meanwhile, Bouygues Telecom reveals flat rate data tariffs translate into a higher number of active Internet users and 3.5 times as much traffic. BTW, slides from the event can be purchased from IIR for GBP399. For more information call customer services on +44 (0)20 7017 7483, quote the event code CG2447MSG and then download them from www.iir-conferences.com/mobileinternet.
I’m back in the blogosphere after four days in Berlin, where I was engrossed in discussions, debates and dialogues around the state of the mobile Internet at the aptly titled IIR Mobile Internet Conference (which I also helped organize). The message that linked the presentations, panel discussions and afternoon round tables: Flat rate data packages are the key driver of Internet use. But this is more than a hunch; executives from TeliaSonera and Bouygues Telecom shared some insightful stats to back it up.
Indra Asander, Senior VP of Content, TeliaSonera, gave us the inside track on SurfOpen across Scandinavia and the Baltic region. The textbook model operator-branded portal that breaks the usability barrier by presenting users with a uniform toolbar across the portal (a unique approach Peggy reported here last month). Predictably, the impact of this approach on Internet usage and behaviour is profound. Indra reports 4-11 sessions per user – ranging from 30-72 page views per session and totalling up to 17MB of data. Overall, some 40 percent of users are online for more than 15 minutes, although it’s also necessary to point out that the same proportion of users spends less than 5 minutes per session.
Antoine Couret, Services Marketing Manager, Bouygues Telecom, updated us on the impact of the flat rate plan the French operator launched in October 2007. In just two months subscriptions are up 32 percent and page views have jumped to nearly 25 million (an increase of 114 percent). Unique users now exceed half a million, equal to a growth rate of 44 percent. This spells good news for mobile operators anxious to sell mobile advertising spots on their destinations and brands eager to reach millions of eyeballs. (Even better if brands could buy cross-carrier, but it is a positive signal to the fledgling marketplace that mobile advertising can flourish now that users are surfing the mobile Internet.)
In short, flat data packages are the shot in the arm the mobile industry has been waiting for. Antoine confided that, prior to the launch of the flat rate plan, the heaviest mobile Internet users were also the group that showed 3 times the propensity to churn from the operator due to ‘bill-shock’ caused by expensive data charges. Although the newest churn figures were not released it’s easy to imagine Bouygues Telecom’s new flat rate data plans will go a long way toward retaining the user segment that matters most: High-use customers who are eager to experiment, try new services, surf the mobile Internet and, thus, generate the highest ARPU.
The takeaway: ALL mobile operators have benefited from the launch of flat data plans and show a significant increase in ARPU. Ok, I admit the same thing happened when fixed network providers introduced all-you-can eat-flat rate tariffs. You’ll recall it was the catalyst for the explosive growth of broadband but also commoditized access and the “dumb pipe” ISPs that provided it. Do mobile operators face a similar fate? Not if they make the most of their mobile analytics and assets. As Indra pointed out, mobile is vastly different. The networks (and the companies that run them) are capable of generating transaction-based revenues around location, content/app billing, m-payment, user authentication and security. Looks like a “smart pipe” business model has its advantages…
But is the “mobile Internet” a misnomer that could cost mobile operators their shirt in the long-run? It may seem far-fetched, but a senior delegate from SFR presented the argument during a networking session and it resonated with both me and others at the table. “If we are so sure that the two media are different, why do we call it ‘Mobile Internet’ as this instantly makes people think of the PC-based Internet?”
Good point. If the industry builds up the expectation that the two “Internets” are the same, then users will likely vote with their feet if the mobile experience is in any way dissimilar. And I’ll leave you with this observation: iPhone ads don’t help; they just whet users’ appetites for an “open” single Internet where access to a Long Tail of perfectly adapted destinations is quick, fast and easy. (And free – otherwise why would a user leisurely browse content such as daily newspapers, for example. You don’t do that when the meter is ticking… )
The excitement about the mobile Internet is fresh and users are curious. Operators have only this one chance to deliver on the promise of a great user experience. Flat rate data is a first step – but providing users their choice of on-portal/off-portal content (and all the cool stuff in-between) is essential…
