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Effective Pricing Strategies for Retaining Margin in Mobile Markets

In this report we address the following questions:

• What factors are causing margin erosion?
• What are the key elements of margin?
• How should MNOs assess the potential margin impact of new pricing propositions?
• What innovative pricing strategies are being used to sustain/grow margin?
• What factors must a mobile operator consider in implementing a pricing strategy?
• Why should operators not be persuaded to reduce tariffs on the basis of international mobile tariff benchmarking?

Price: EUR 2,500.00 / GBP 2,000.00

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1
Introduction
1
1.1
Overview
1
1.2
Objectives
1
2
Factors Impacting Margin
2
2.1
New MNOs
2
2.2
New MVNOs
2
2.3
Fixed Line Substitution
3
2.4
Bundling Broadband and Carrier Pre-select Service (CPS)
4
2.5
Mobile Number Portability
4
2.6
Falling Interconnect Prices
5
2.7
VoIP
5
2.8
Regulatory Pressure for Transparency
5
2.9
International Benchmarking Studies
6
2.9.1
Objectives
6
2.9.2
Considerations: Factors Affecting Mobile Pricing
6
3
Margin Impact of Pricing Strategies
8
3.1
Elements of Margin
8
3.1.1
Overview
8
3.1.2
ARPU / Revenue Uplift
9
3.1.3
Interconnect Costs
9
3.1.4
Operating Costs and Economies of Scale
10
3.2
Margin Impact Evaluation Framework
11
4
Effective Tariff Strategies
12
4.1
Overview
12
4.2
Temporary Discounted Tariffs
15
4.2.1
Objective of Tariff
15
4.2.2
Orange UK Example
15
4.2.3
Implementation Considerations
16
4.3
Permanent Discounts Based on Usage or Spend
16
4.3.1
Objective of Tariff
16
4.3.2
Bouygues Telecom France Example
16
4.3.3
T-Mobile UK Example
17
4.3.4
Implementation Considerations
18
4.4
Tenure / Loyalty
18
4.4.1
Objective of Tariff
18
4.4.2
O2 UK Example
18
4.4.3
Implementation Considerations
19
4.5
Add-Ons / Bolt-Ons
20
4.5.1
Objectives of Tariff
20
4.5.2
Mobistar Belgium Example
20
4.5.3
Implementation Considerations
21
4.6
Hybrid Tariffs
21
4.6.1
Objectives of Tariff
21
4.6.2
T-Mobile UK Example
22
4.6.3
Implementation Considerations
23
4.7
Tariff Matching and Best Plan Advice Schemes
23
4.7.1
Objectives of Tariff
23
4.7.2
Orange UK Example
23
4.7.3
Implementation Considerations
24
4.8
Fixed Line Substitution ('FLS')
26
4.8.1
Objective of Tariff
26
4.8.2
O2 Germany 'Genion' Example
26
4.8.3
Implementation Considerations
27
4.9
Community Tariffs
27
4.9.1
Objective of Tariff
27
4.9.2
T-Mobile USA Example
28
4.9.3
Implementation Considerations
28
4.10
Segmented Tariffs
29
4.10.1
Objective of Tariff
29
4.10.2
Megafon Russia Example
29
4.10.3
Implementation Considerations
30
4.11
Simplified/Flat Fee Tariff
30
4.11.1
Objective of Tariff
30
4.11.2
Simyo Belgium Example
31
4.11.3
Implementation Considerations
32
5
Conclusions
34