45% of Mobile Service Providers Offer At Least One Zero-Rated App

Some 45 percent of mobile service providers operators offer at least one zero-rated app, and 65 percent of those zero-rate Facebook, according to a study by Allot Communications.

Some will see the partnerships between mobile Internet service providers and application providers as the key element. Others might focus on the notion of “zero rating” use of a few applications viewed as having high end user value.

That, in turn, is important because it illustrates the downside of “treating all apps equally.” Sometimes, especially in developing nations, app discrimination--providing one app at no charge--provides clear value for people.

Application “non-discrimination” and “no blocking” tends to be the language used by network neutrality supporters. Most people likely have no issue whatsoever with the notion that lawful apps cannot be blocked, in the U.S. market.

As useful as “no blocking” is as a political slogan or principle, new legislation to prevent such blocking arguably is unnecessary, as the Federal Communications Commission already enforces such principles.

Application non-discrimination” arguably is the heart of the matter, but possibly for new reasons.

The original concern was use of quality of service mechanisms, especially packet prioritization, as opposed to the present “best effort only” level of service available to U.S. consumer Internet access customers.

The concern was that Internet service providers would create new tiers of service that offered better end user experience at times of network congestion, but that such services would lead to additional costs for application providers who wanted such access, as they now pay firms such as Akamai for content delivery services that provide similar benefits over the network backbones.

Recently, the rubric of network neutrality has been extended into other areas--including network interconnection--that similarly have “cost of doing business” implications for app providers.

Of course, extending an analogy too far can backfire. The concept of  “treating all apps equally” is attractive, and sounds eminently fair.

But mobile service providers in many developing markets find that treating apps quite unequally provides value for end users and creates demand for mobile Internet access.

In fact, about 85 percent of mobile service providers promote certain over the top apps--and not all apps--according to Allot Communications.

Quite often, mobile service providers also zero-rate Facebook, Twitter or WhatsApp, as a way of illustrating the value of mobile Internet access.

Social apps, in other words, have proven to be attractive “gateway” apps for consumers. Actual policies differ. Some service providers offer free Facebook access only for newsfeed text and
text postings.

Others offer free Facebook messenger use, while others zero rate all Facebook traffic, with no need for a mobile data plan.  

In 2012, 27 percent of operators sampled offered application-centric plans to their customers.

In 2014 these partnerships are up to 55 globally, according to Allot. And some 40 percent of application-centric charging plans focus on zero rating. The rest are premium services that do carry a retail price tag.

Application-centric plans often provide TV streaming, on-demand video streaming, music streaming and music storage. But GPS location services, parental control and tracking features often are offered for an additional fee.
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