Wednesday, August 19, 2015

LTE-U Offers Indirect and Direct Revenue Upside Potential

As always is the case, contestants in the telecom services business will use tools in ways viewed as helpful to their revenue models. Upstarts trying to take market share are more likely to try disruptive tactics. Market leaders are more likely to seek ways to directly monetize new technologies and platforms.

In other words, attackers are likely to “give away value and features” if it helps them grow share, while leaders are more likely to want to try and charge for new value and features to directly boost average revenue per account.

Ways to bond capacity from mobile--Long Term Evolution (4G) and coming fifth generation (5G)--are likely to follow that pattern.

T-Mobile US, for example, already is exploring ways to use pre-standard Long Term Evolution aggregation of mobile and Wi-Fi assets. In part, that is because T-Mobile US arguably has fewer assets in the network coverage area, compared to AT&T and Verizon.

So bonding its mobile network assets with any available Wi-Fi will improve user experience, giving customers an experience equivalent to, or better than, having a mobile network infrastructure that is more developed (capacity and geographic coverage).

As would any challenger, T-Mobile US might see bonding of mobile and Wi-Fi assets as a way to monetize the feature indirectly, in the form of greater customer numbers. Other providers are more likely to try and monetize more directly, such as by charging all access--mobile or mobile plus Wi-Fi--as coming out of the mobile data usage allocation.

Use of Wi-Fi alone, as when a user switches to Wi-Fi access instead of mobile, would continue to be unaffected by the capacity aggregation techniques.

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