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Freemium Business Models for Mobile

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In this continuing series of blogs about Mobile Data Monetization*, let’s look at the Service Provider Freemium business model, which involves offering a basic service for free (indefinitely, or for a trial period) to incent some other subscriber behavior that the operator can monetize. Let’s look at the typical reasons that operators have in offering a Freemium service:

1.) Encourage users to upgrade up to a higher-price, higher-quota mobile data service in order to get the Freemium service. We’re seeing more and more of this approach, especially in conjunction with LTE service offers. For example, in the early days of Verizon Wireless’ LTE roll-out, it offered a free 1-year subscription to NFL Mobile Premium to drive subscriber upgrades from 3G to its LTE data plans and smartphones / Mi-Fi devices. Now, with the adoption of LTE services well underway, Verizon Wireless is leveraging its significant investment in NFL content rights by offering NFL Mobile Premium as a Freemium service to users who opt for one of its new “More Everything” pricing plans. In many markets where mobile data usage is low, some operators have taken to offering “zero-rated” usage of popular social media sites such as Facebook and Twitter for a period of time, usually 6 to 12 months, during which the data used does not count towards the subscriber’s monthly quota. The goal of this approach is to get the user accustomed to using these services over mobile so that he or she subscribes to a data plan at the end of the Freemium period.

2.) Entice users to eventually pay a premium for a more Read More »

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We Won! LTE Asia Awards Update

So great news! A couple hours ago, the LTE Asia Organizers tweeted:

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Congrats to our ‪#LTEAsia award winners: Best LTE Core Network Product ‪@Cisco

Our Cisco ASR 5000 Series has been chosen the winner of the LTE Asia Best Core Product in the 1st Annual LTE Asia Event. Our ASR5000 Series is the market’s Read More »

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LTE-U By Any Other Name is Licensed-Assisted

I recently read the rather interesting announcement from NTT DoCoMo where they demonstrated LTE running over the unlicensed 5GHz band.  They report a 60% increase in spectral efficiency over IEEE 802.11n Wi-Fi.  The article also noticed that LTE-U is now referred to as Licensed-Assisted Access using LTE or LAA-LTE.  This caused me to pause, and think about several things.

The comparison between LAA-LTE and Wi-Fi is not (and should not be) about spectral efficiency. Rather it is about several other factors:

  • A robust network with a diverse client ecosystem (does anybody reading this blog own an IP device without Wi-Fi? How many of those devices contain LTE? How many are Wi-Fi only, without any SIM card?)
  • The ability to support neutral host deployments (are stadium owners willing to deploy LAA-LTE if it only supports one operator?)
  • The ability to co-exist in a multi-operator environment (how would LAA-LTE operate in dense environments when it has to co-exist with LAA-LTE APs from other operators?)
  • The ability to co-exist in a multi-technology environment (would if it adversely affects the existing and extensive deployments of Wi-Fi infrastructure?)
  • A number of Mobile operators have agreements with Wi-Fi providers for offloading cellular traffic (how does one enable such a scenario with LAA-LTE?)

And if you really want to talk about speeds and feeds, it’s interesting that the test was done against 802.11n, when 802.11ac is now widely available, providing speeds that exceed LTE-Advanced speeds of 1 Gbps (IEEE 802.11 ac Wave 1 provides maximum speed of 1.3 Gbps and Wave 2 provides maximum speed of 3.5 Gbps).  It’s also important to note that LAA-LTE has not been defined yet and so it’s very likely that the LAA-LTE implementation tested here does not have the politeness mechanisms required in certain regulatory domains like Europe. These mechanisms allow fair usage of the unlicensed spectrum by allowing other users an opportunity to transmit and share the spectrum.  These mechanisms already integrated into Wi-Fi will add additional overhead to LAA-LTE that will reduce its spectral efficiency, a factor that needs to be taken into account in any comparison.

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Reality Check

Hype is interesting, but Read More »

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Off to the LTE Asia Awards: Singapore or Bust

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Think about what is going on in the APJC Mobile Market for a minute:

  • In Korea, mobile data traffic on 2G, 3G, and 4G networks increased approximately 70% between 3Q 2012 and 3Q 2013.
  • In China, mobile data traffic of China’s top 3 mobile operators grew 90% in 2012 and 72% from mid-2012 to mid-2013.
  • In Japan, mobile data traffic grew 92% in 2012 and 66% from 3Q 2012 to 3Q 2013, according to Japan’s Ministry of Internal Affairs and Communications
  • While in India, Bharti Airtel reported mobile data traffic growth of 112% between 3Q 2012 and 3Q 2013 and Reliance Communications reported mobile data traffic growth of 116% between 3Q 2012 and 3Q 2013.

Nomophobia is Read More »

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Multi-Device Data Plans: A Distinction without a Difference?

In this continuing series about Mobile Services Monetization, let’s look at so-called Multi-Device Data Plans. Spurred by the adoption of the Apple iPad and Android tablets, many operators have introduced mobile data plans that encourage users to connect these devices to 3G and LTE networks, rather then relying solely on Wi-Fi. These Multi-Device Data plans offer subscribers the ability to have a single contract that allows use of more than one device against a single monthly data usage quota. This provides users convenience, value, and incentives to buy cellular-enabled tablets and other “secondary devices”. Further, these Multi-Device Data Plan have driven higher data use and pushed users to increase to higher-tiered data quotas, according to some operators.

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Trying to stand out among U.S. operators, T-Mobile recently announced that for a fee of $10/month, it will allow subscribers to add a tablet to an existing smartphone subscription *and* get a tablet data quota equal to the quota they have signed up for with their smartphone. So for only $10, this Read More »

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