The Mobile Internet Report Key Themes*

Tiered Pricing =
Key to Providing Network Management + Capturing
Incremental Revenue from Mobile Data Growth
• We expect tiered pricing of mobile services to become the norm across the
carrier industry
All major carriers in Japan have adopted tiered flat-rate data plans, ranging from
~$4 per month for light users to ~$45 per month for heavy users. Similarly, all
major carriers in the US / W. Europe utilize tiered flat-rate voice plans.
• Tiered pricing could become a profit center over time, not just a network
management tool
As consumers use more online videos or download applications / music more
frequently, the “starter” 1GB packages available today will become increasingly
inadequate. It will be up to the operators to upsell consumers successfully. A key
challenge will be to give the consumer a clear “clock” of usage that does not
unnecessarily complicate the experience. We doubt that it will ever be feasible to
charge differentially for location or time to take account of network capacity issues
– the marketing message would become too complex, and in general there are
likely to be spectrum or engineering solutions to network capacity constraints.
Source: Nick Delfas, Morgan Stanley Research. 514