MONETISING LTE SERVICES – Analysys Mason

DEVELOPING NEW REVENUE STREAMS THROUGH DIFFERENTIATION AND INNOVATIVE PRICING5_Rohan_Dhamija_Figure1_web_lightbox

LTE services by user and product segments [Source: Analysys Mason, 2014]

MNOs must differentiate LTE services from those of 3G

  • Enhanced data for consumers is a key selling point for LTE
  • VoLTE (+ RCS) allows operators to offer integrated voice, video and instant messaging (IM) services with the added benefit of mobility
  • Enterprise solutions can benefit from enhanced data services
  • LTE can also provide connectivity as a substitute to fixed networks
  • Wholesale solutions may emerge as an attractive opportunity for operators. Because LTE network latency is lower than 3G, operators can develop new revenue streams by selling bandwidth for wholesale services (such as utility and M2M services). Verizon is at the forefront of this with projects in sectors such as education.

Pricing is determined by LTE positioning relative to 3G

  • Pricing premium if positioned as a value-added service with clear benefits (such as guaranteed speeds or premium content)
  • MNOs can also experiment with bundling. Data sharing across devices is being offered, with the aim of monetising devices (such as tablets) otherwise lost to Wi-Fi.