PRESS ANNOUNCEMENT

The industry used to suffer from what Brad Rees, CEO of Mediacells, calls ‘The Tequila Effect’ – now there’s a hangover cure from the operators of all people!

As recently as 2007, a customer would stumble across the mobile internet on his mobile phone and, after enjoying a temporary excitement with this new media experience, he’d be hit with a huge bill shock at the end of the month. Operators used to allow users to surf at an exorbitant ‘out of bundle’ rate (see Mediacells Mobile Internet Evolution - Pricing data below) and get charged a king’s ransom for the privilege.  It really was the mobile equivalent of binge drinking tequila - once bitten by the mescal bug never to revisit.

In just two years, the business model has changed enormously around how operators price the mobile internet. The significant step change that has taken place since 2007 is the move from a price ‘per megabyte’ model to a price ‘per day’. This is proving much easier for the average Joe on the street to understand -  nobody knows what a megabyte of data looks like, but everyone understands how many hours there are in a day. 

If you look at O2 in 2007, Bi, (Before iPhone!), the network was resisting the commercial move of offering customers a flat-rate data tariff. In 2009, O2 leads the UK in mobile internet average revenue per user (ARPU). Just as significantly, T-Mobile and Vodafone have pulverised their daily rates outside of ‘data bundles’. T-Mobile, most notably, reduced the rate from a whopping £7.50 per MB in 2007 to capping the mobile web surfing bill at £1 per day in 2009. Vodafone has reduced its daily rate from £2.35 per MB in 2007 to just 0.50p per day in 2009. Mediacells estimates that the impact of pricing transparency of mobile internet services will be positively received by the public and will encourage mobile marketing and advertising to take off properly and with maturity: 

“Cost to the consumer is everything and you can see from the Mediacells Mobile Internet Evolution data (below) that, over time, there is a genuine commitment on the part of the networks to make the mobile internet price friendly,” says Brad Rees, CEO Mediacells. “The days of bill shock around the mobile internet are nearly over with a few exceptions, Three still charges per megabyte outside of allowances, for example. Orange, Vodafone and T-Mobile now have trained and proactive CRM teams, who work with the technical network guys to call up newbie surfers who haven’t got a flat-rate bundle but who are surfing the net and upsell a data bundle within days of them surfing the mobile internet.”

This has led to an increasing propensity, in urban inhabitants at least, to replace playing mobile games like Snake with accessing the mobile internet in context. This means using your mobile to access Facebook, MySpace or even YouTube in an environment where getting a laptop out would be intrusive and inappropriate.