Elisa Launches Mobile Data Tiers Differentiated by Speed

Consumer internet access plans in the fixed and mobile network domains have not changed much over the last couple of decades. Fixed network services are differentiated by speed; mobile plans differ by data allowances. 

But one of the potential benefits of 5G, with its virtualized core and ability to support network slicing--creating virtual private networks that could support speed tiers--is a chance to revamp the way mobile data gets sold, in ways that arguably make it easier to sell value. 

One clear example is a shift in mobile data pricing from “amount you can use” to “how fast do you want it?” That would allow mobile service providers to create tiered pricing plans that are based on “speed” rather than “data allowance.” The notion is that consumers more easily can see the value of “faster or slower” compared to “more or less.”

The former approach arguably creates products that are differentiated in distinct qualitative ways, instead of varying only by volume. The difference is that different speed plans are akin to three types of squash, where volume-of-consumption plans are similar to one type of squash, sold in one pound, 10 pound or 50 pound sacks. 

source: Mobile Experts

The argument is that such tiered-speed plans can be combined with usage allowances, no-contract or contract plans, contract length or perhaps type of  device that offer consumers the ability to tailor their plans to consumption in a more personalized way.

Heavy users who want the fastest speeds, lowest latency or perhaps even assured performance would be able to buy such plans, even if the quality of service plans might sell at business customer prices. 

Other subscribers will be able to pay less for moderate usage, moderate speeds and best effort service levels. All that allows both for product differentiation, higher average revenue per account and hopefully more customer satisfaction as well.

So far, no U.S. mobile operators have tried this approach to retail packaging. Also, as all the four major providers now offer flat rate, unlimited usage plans, it is not possible to scale retail prices with usage. Adding speed tiers might also allow a chance to partially tie usage to retail price.