The Mobile Internet Report Key Themes*

Net Neutrality Will Take Time –
Tiered Pricing Should Manage Traffic / Drive ARPU
We expect the regulatory framework for wireless networks to eventually mimic
wireline regulations…
…although this process could take decades and involve numerous rounds of legal /
administrative reviews (as in US wireline industry deregulation in the 1950s-1960s).
Tiered pricing of mobile service likely to become the norm across the carrier
industry
Mobile networks are arguably more sensitive to usage than wireline networks – a heavy
user positioned close to a 3G base station should enjoy excellent service, but her use of
the service shrinks the size of the cell, which can create significant problems for the
network. Tiered pricing is the best mechanism to manage traffic.
Tiered pricing could become a profit center over time, not just a network
management tool
As consumers use more online video such as YouTube, or download applications/music
more frequently, the 1GB starter packages available today will become inadequate.
Carriers will likely have an opportunity to upsell / bundle different tiers of services to
drive mobile data ARPU.
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