‘Data buckets’ arrive for the connected person

  • Data bucket plans spells significant cost savings for operators
  • Consumers will need to be educated however

‘Data buckets’ arrive for the connected personSPANISH telco Telefonica, Canadian operator Rogers Wireless, Hong Kong operator CSL and Norway’s Telenor are just some of the growing number of operators that offer “data bucket” plans.
Such plans provide operators with significant cost savings as they do not have to acquire and manage two separate subscriptions for a single customer, research firm Ovum said in a statement.
A combined account also makes it far easier for operators to find out what a customer is using their device for, and when. This information makes upsell opportunities clearer and easier to implement, and enables the possibility of providing the data to third-party applications and advertisers, Ovum said.
But consumers will need to be educated about bucket plans, especially in markets where family voice and data sharing plans don’t already exist. Operators will also have to ensure that bucket plan users are provided with adequate data monitoring tools to prevent excess usage charges if big-screen devices unknowingly consume a high proportion of the bucket.

“For an operator, launching a bucket plan makes the customer stickier, as having one contract stops users from picking the best smartphone, tablet, or dongle plans from different operators,” said Nicole McCormick, Ovum’s Telco Strategy senior analyst.

“Bucket plans also reduce subscriber acquisition costs, which will have a positive impact on operators’ profitability and margins. However, data buckets often mean that multiple plans are combined into one, which presents the significant risk of revenue cannibalization.

“As the vast majority of consumers use tablets to connect to home WiFi services, operators need to provide a compelling argument for consumers to take up a bucket plan,” she said.

While it is still early days for bucket plans, it is clear that they are here to stay and will become increasingly pervasive.
Between 2011 and 2016, Ovum expects that mobile broadband connections from smartphones, tablets, and USB modems will grow at a compound annual growth rate of 24% to reach almost four billion connections.

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