Mobile operators urged to commoditise data use

Operators should charge a flat subscription rate, plus a usage bill, to maintain cash flow

Mobile operators need to change how they charge for voice and data services in order to create a more viable long-term revenue system, according to Ovum.

The analyst firm said in a new report that operators must accept market conditions and specialise in providing data services to the best of their abilities.

"Mobile operators have always hoped they wouldn't be reduced to bit carriers. While that idealism was warranted five years ago, today's reality calls for them to accept that there isn't much they can do beyond carrying voice and data traffic," said Emeka Obiodu, a senior analyst at Ovum.

"There is a profitable business for operators that position themselves as low-cost enablers of agnostic networks, carrying bits as efficiently as possible."

Obiodu suggested that operators should look to the utilities market for inspiration, and charge a flat subscription rate, plus a usage bill, to maintain a steady cash flow.

"Utilities maintain a grip on pricing by retaining a rental element and charging more for incremental usage. Mobile operators have largely abandoned separate rental revenues but it's good to see them starting to impose controls on data use," he said.

O2 announced plans last week to remove all unlimited data plans from its smartphones offerings. From 24 June customers paying up to £35 per month will get a 500MB allowance, rising to 750MB for those paying £45 and 1GB for those paying £60 per month.