Sunday, August 31, 2014

What's More Important: Bigger Buckets or Lead App Plans?

It isn’t yet clear whether various U.S. mobile service provider promotions that provide more mobile Internet access for the same, or lower prices, or new “lead app” packages will have greater long-term impact.

On one hand, bigger usage buckets for the same, or lower price, might make mobile Internet access a more-potent competitor to fixed access, over time.

On the other hand, “lead app” packages might lead to creation of new customer segments in the same way that the ability to buy single TV programs or channels could reshape customer segments in the video entertainment business.

Whether “more for less” or “buy only what you want” will have bigger impact long term.

T-Mobile US or Sprint adding more gigabytes to Internet usage buckets are an example of the former. Virgin Mobile Custom is an example of the latter.

It might be tempting to argue that “more for less” is the more-important trend.

But in the content consumption realm, the “buy only what you want” feature might be equally important. The issue is whether it will be as important in developed country markets as it could be in developing countries.

As content unbundling represents the big potential change in the video entertainment business, so content “unbundling” might be important for many mobile users or accounts.

The Virgin Mobile Custom plan allows account owners to control and limit usage by users on the plan, a feature deemed helpful to parents.

Virgin Mobile Custom allows account holders to activate up to five lines for as little as $6.98 per line per month.

The “Base” plan comes with 20 texts and 20 voice minutes, while the “Unlimited” plan for $35 provides unlimited talk and text.

The interesting parts of the plan are the ways account holders can customize usage.

After purchasing the basic level of service, customers can buy unlimited texting for $10 or  unlimited voice for $18 a month.

Customers also can add unlimited access to specific social apps such as Facebook,Twitter, Instagram, Pinterest or  Pandora for $5 a month.

Another option provides 30 minutes of international calling to specific countries, and can be added on a recurring or non-recurring basis.

On the other hand, it can be argued that, if usage buckets offer more value for less money, there is no need for special “lead app” plans.

The main app class where that might not be the case is entertainment video, where moderate to heavy usage would potentially be a burden for all but fully unlimited plans.

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