In my last post, I touched on the idea of transparency, or the current lack thereof among operators. As I mentioned then, I’ve long felt that transparency is an area where operators traditionally fall short, failing to make vital information easily accessible to customers. Given the recent changes in pricing models and policy that we’ve seen, transparency demands are now being pushed to the forefront even more. With the end of flat rate charging, bill shock becomes a greater risk for many users, and a lack of transparency around pricing policy and bandwidth packages complicates the issue even more.

What’s stopping providers from being transparent about their terms of service, licensing fees, etc? Quite possibly, the idea that these areas contain negative sentiments such as “limits” and “restrictions,” could make providers hesitant to openly share them with consumers, instead burying them at the end of contracts in hard to read fine print. Yet, as a consumer of these services, I think knowing the negatives up front is far more appealing than finding them out through a high bill, limit on my service, or other inconvenience. In this sense, transparency, even if it involves perceived negatives, would work to the operators’ advantage by helping them avoid disgruntled customers who have discovered the limits and restrictions the hard way. These customers are less likely to increase service and more likely to churn, resulting in a loss for the operator.

Google and Verizon’s recent net neutrality proposal, announced earlier this month, addresses the need for better transparency of service terms and network management practices for communications networks. One of the main tenants of the Google-Verizon proposal directly addresses the idea of transparency, stating: “Providers of broadband Internet access service would be required to disclose accurate and relevant information in plain language about the characteristics and capabilities of their offerings, their broadband network management, and other practices necessary for consumers and other users to make informed choices.”

Transparency clauses such as these allow consumers to know and understand what is happening with their service, and they should be made more visible. Only time will tell how the whole Google-Verizon proposal will play out, and there are many more aspects and expected outcomes to it that will be discussing at a later time. That aside, the inclusion of a transparency clause is a step in the right direction for providers. From this consumer’s standpoint, it can only benefit operators moving forward.

Temperatures have been rising as of late in the U.S. mobile communications landscape. The FCC and CTIA have recently exchanged some words about the findings of a recent FCC survey of American mobile service users. The survey results, released back in May, reported that one in six have experienced some sort of “bill shock,” the receipt of an unusually high cell phone bill without prior warning, often due to unexpected roaming charges. CTIA then questioned the validity of the survey in a response on its blog, in which the author suggests that the survey findings were misleading and the term “bill shock” possibly misused. This in turn prompted a response from the FCC on their blog, saying that instead of trying to undermine the study, the CTIA should focus its efforts on helping to resolve bill shock.

The dominos are starting to fall. Earlier this month, the beginning of the end for flat-rate mobile data started when AT&T announced the elimination of a flat-rate data plan option for new subscribers. Hot on their heels, O2 announced a similar plan change this week, paving the way for UK providers to make the move away from flat-rate. Orange and T-Mobile, Hutchison Whampoa and Vodafone are expected to follow suit.

The move to "pay as you go" plans is designed to keep 'abusive' mobile data users from causing network congestion problems - something AT&T in particular has come to know only too well. The overage charges for AT&T's plans may boost revenues for the provider, or at least stem some losses from no longer provisioning an endless amount of data for every user.

But plans like these also present some potential stumbling blocks for providers as they move to more tiered pricing policies. At Management World last month, I had the pleasure of leading a roundtable discussion amongst several global operator executives about the future of 4G networks and variable pricing policies. As the implication of providing more customized pricing plans became clearer, a few interesting concerns were voiced:

1. Personalization vs. privacy:
New pricing models must deliver true differentiation for customers while maintaining simplicity, predictability and high value. To provide that value, operators will have to personalize services, which will mean learning more about customers' activities, habits, etc. Operators, perhaps reassuringly, indicated they might not be comfortable knowing so much about all of their customers. How will the balance of privacy and personalization work in the new mobile world?

2. Data demand vs. supply:
With the growing availability of new and smarter phones and mobile devices, how will data supply ever keep up with demand? Data consumption is expected to double every year for the next five years, and if that's the case, how will 4G provide enough bandwidth to cope? For AT&T specifically, if current customers are allowed to keep their unlimited, flat-rate data plans for only $5 more per month, what long-term incentive is there for them to switch to one of the new capped plans?

3. A Google tax?
Do operators risk losing customers if they switch to a new model that may increase service costs? Operators are looking at ways to split the cost model up so subscribers aren't saddled with paying more. But if that's the case, who will pay more? Should the content providers shoulder the burden? Should there be a 'Google tax'? Should they try and create partnerships with the content providers that enable a new profit model?

4. Should net neutrality equal government subsidy?
4G networks are expensive, hence the switch to new pricing models that will solve the cost vs. revenue dilemma of flat-rate models. But at the same time, governments' push to keep network access free and open for the greater good is making many operators believe the government should be subsidizing the construction of networks that will bring that access to more people. Is a government subsidy in store for mobile providers?

-John Aalbers

With Management World 2010 still fresh in mind, I’d like to take this opportunity to provide a quick “debrief” from what was undoubtedly our busiest and most exciting show so far this year.

One of the hottest discussion points in Nice this year was the move to 4G networks. Providers have struggled with numerous problems resulting from the mobile data explosion, including spiraling network capacity costs, dwindling profit margins, and an increase in customer complaints. Many expect the impending transition to 4G to address these issues, but operators must be properly prepared before they can successfully make the switch. I enjoyed the Managing and Monetizing the 4G Environment executive panel on the second day of the show, when as provocateur (I feel like I should be in a spy novel when I use that word) I had the chance to interact with leaders from operators like BT, Vodafone and the like about their approach to making that transition successful. I look forward to exploring these specific issues and key panel takeaways in subsequent Volume posts.

On the first day of the show, my colleague Ben McCafferty addressed a similar issue in his joint panel discussion with France Telecom’s Bruno Goes. The panel, Charging Ahead: New Platforms to Support Pricing-Model Diversification and Traffic Management, looked at the current network capacity crunch and how providers like France Telecom are approaching the ensuing challenges without investing in expensive infrastructure build-outs.

Overall, the show was a great success. We met with leading press and analysts in the telecoms space, heard from industry leaders from around the world, took in a range of keynotes and panels, and of course enjoyed the lovely setting in Nice, France. The espresso and lattes served up at the stand this year weren’t bad either!

-John Aalbers

Photo courtesy of Light Reading

Welcome to VOLUME, the official Volubill corporate blog. The tagline, “Tuned in to Telco” tells part of the story of what we’ll present here. Our place in the telecommunications market means we’re constantly observing the industry’s changes. But we believe there’s more to capitalizing on that position than just setting our tuner to receive. We aim to broadcast, too. We’ll be providing our take on how the industry is evolving, and turning up the volume on our involvement in the changing telecom landscape.

The confluence of data consumption, mobile communications and the increasingly-sophisticated devices is the parallel focus for VOLUME. These three elements are compounding network management challenges. In some cases, such as the iPhone’s debut, the effects of these challenges and shortfalls in technology have been highly-visible and painful for operators. Data consumption, particularly of the mobile variety, is rising at an exponential rate. More sophisticated devices like the iPad are causing huge rises in network traffic congestion –so severe in some cases that they are being banned on certain networks.

These trends are amplifying, and they will push the global telecoms market in a new direction. Providers’ usual business models, and the pricing models that consumers are used to, will change. Many operators, even those in developed markets, have already started moving away from offering the ‘one-size-fits-all’ services that characterized the traditional telco.

These near-term challenges, though, will ultimately produce a refined and improved communications experience for everyone. The new standard for offering services will be personalized, customized, and, most importantly for operators, sustainable – using tailored pricing models that value personal preferences, real-time network traffic awareness and service-specific demands.

VOLUME will look at how these ideas are changing the industry through the lens of Volubill’s unique approach to policy management, enforcement and charging. We believe these three technologies, when applied aptly, have the ability to enable this more personal future of communications more quickly and with greater satisfaction for everyone.

It’s going to be a good program. Stay tuned.

-John Aalbers