In a mobile application ecosystem dominated by Over-the-Top (OTT) providers, mobile operators need to exploit new business models in ways to create value with them. One example of a Monetization use case promising a new business model is Sponsored Data. An early proponent among operators has been AT&T, who defines Sponsored Data as: “a service that enables companies to sponsor the data usage for specific content on behalf of eligible AT&T wireless customers [who] can browse, stream and enjoy content … without impacting their monthly data plan allowance.”

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A year after launch, AT&T spokespersons remain upbeat about its Sponsored Data program, despite only signing up about 10 content partners. What are some of the services enabled? Liberty Mutual insurance customers, for example, can send their smartphone photos from accident claims up to the Liberty Mutual cloud, without incurring data charges from AT&T. Kingsoft gives users of its mobile office software sponsored access to file access and transfers. AT&T states that is sees great interest in Sponsored Data from a variety of developers and content owners, but that such a service based on a new business model will take time to establish itself.

Waving the Green Flag

Other operators are experimenting with the Sponsored Data business model. Customers of T-Mobile’s Music Freedom service can now stream all the music they want from the most popular streaming services without it counting against their 4G LTE data limits. Other operators offer similar sponsored Internet radio services such as Spotify and Pandora, or social media applications like Facebook.

Going beyond sponsored data on traditional mobile devices, verticals such as Connected Car show potential for innovative sponsored data opportunities. In March, AT&T announced they will use Cisco’s virtualized mobile Internet solution for Connected Car, and other operators and car manufacturers are developing similar solutions. Car makers may soon be offering sponsored streaming data services – alone and in partnerships – to LTE-connected cars, possibly even offering more aggressive sponsored data packages for certain car models as a differentiated feature. This could become a big market for Sponsored Data programs, as the number of cars with built-in connectivity will grow from 10 percent of the overall market in 2013 to 90 percent by 2020, based on a survey sponsored by Mobile operator Telefónica.

Many believe that the key to monetization of the Sponsored Data business model will be in areas where the customer offer is associated to valued content, as opposed to a general incentive to preserving data quotas. Ever-increasing monthly data plans and more pervasive Wi-Fi availability are making consumers less worried about exhausting data quotas or incurring overage charges.

See how Cisco can help operators launch new business models with Sponsored Data services in this 2-page overview.

Click here to learn more about some of the Cisco solutions that enable Sponsored Data services:

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Brian Walsh

Senior Marketing Manager