Friday, November 03, 2006

The Hybrid Strategy

McKinsey has an excellent, free (with registration) series on the mobile telecoms market.

This week’s installment featured interviews with both T-Mobile Croatia’s CMO as well as Jon Erik Haug, the head of consumer mobile business for Telenor in Norway.

An excerpt from the interview:

McKinsey: Should mobile operators launch flat-rate schemes to head-off the VoIP threat?

JON ERIK HAUG: Ideally, operators should try to avoid flat rates as long as fixed-to-mobile convergence continues. Operators should, however, be ready to launch hybrid plans, that is to say, price plans with flat-rate elements, in areas where the treat from alternative technology is imminent – such as, for example, the home.

We at UMAToday couldn’t agree more. What strikes a cord is Mr. Haug’s approach to provide differentiated service plans which best match the competitive environment.

The threat from wireless VoIP providers is highest in places where WiFi exists, specifically in the home and office. Rather than re-structuring the entire mobile pricing plan to counter a flat-rate competitor, develop a hybrid strategy. Limit flat rate pricing to Wi-Fi zones (home/ office), and retain the valuable per-minute pricing of the general mobile network.

UMA is the ideal technology for operators to precisely target locations with the highest competitive threats, and then use the same technology (Wi-Fi) to achieve similar cost structures and beat the competition. And this all occurs without having to de-value existing mobile plans.

No comments: