Mobile - evolution of pricing

How will mobile pricing models evolve?

Open access, broadband Internet depend on how services are bundled and priced

So we now have a nationwide WiMAX network officially under construction that's backed by WiMAX enthusiast Intel, open-access activist Google and several cable companies eager for a mobile service to sell as a complement to their traditional offerings. What might this lovefest mean for open-access service packages and pricing? Will it be "same old, same old" or will we get totally cool new stuff?

Sprint, when it formed its Xohm WiMAX business unit last year, pledged to allow any compatible device and any application onto its network. In conjunction with open-access rules handed down by the FCC for part of the recently auctioned 700MHz U.S. spectrum, that move has planted the expectation for mobile operators to open their traditional “walled gardens” to independent innovation from handset makers and mobile application developers.

At the core of all this open talk, however, lies the $40,000 question: what kinds of service packages will carriers create and how will they price them?

The good news is that the capabilities needed for the mobile network operators to get creative in this way are en route. Openet, a company that supplies transaction processing and management products to the service providers, for one, plans to announce two new products at the Telemanagement World conference in Nice, France, next week that could give carriers the flexible mobile service packaging and billing capabilities they need to bundle services into pricing tiers.

One is FusionWorks PolicyManager, which has been sold behind the scenes already for about six months, says Openet Chief Marketing Officer Mike Manzo. PolicyManager allows the provider to offer temporary bandwidth boosts when needed, and to prioritize traffic according to the subscriber’s profile and what service tier they’ve paid for. For example, in an IP network, if users are accustomed to paying for voice services by the minute, PolicyManager could identify the subscriber and the session, apply QoS prioritization if it’s a VoIP session, and enable the carriers to automatically bill accordingly.

Another is FusionWorks BalanceManager, which would allow a single phone to be associated with multiple accounts. This addresses the idea of people using a single device for work and home. Calls and activity made within the profile set up by business get billed to the company (for example, up to X number of minutes of usage); beyond that, the bills are sent to the subscriber’s home.

‘Net neutrality purists will say that such powerful tools that enable a carrier to ID application type and subscriber, then treat the traffic in compliance with the user’s pricing plan portends the danger of unfairly blocking or degrading traffic from potential competitors. I say the tools are necessary for creative service packages that match user capabilities to their pricing plans and keep the network from otherwise exploding when uncontrolled, high-bandwidth applications flood it.

But that discussion is another kettle of fish.