Produktivity

2006-05-08

Is the world flat?

There are a number of posts around the blogosphere taking issue with the pricing strategies of telcos. In general, the view seems to be that usage based pricing leads to customer dissatisfaction unless it is done just right.
Dean Bubley writes a seminal piece on Value-based pricing that every operator should pin in their marketing departments (though I'm not sure about his examples, for me, airport food is definitely an example of Resentment Pricing!)

The question is; is usage based pricing on the way out?

For high value content, there is an argument for pay-per-use, but for marginal applications like SMS and Voice, flat rate, all-you-can-eat is becoming the only practical option. How much does it cost to collect and bill the events if it's not flat rate?! How many telcos know the answer to that question!?
The customer needs predictability in their monthly or daily charges, especially as the services diverge into TV, information services and a whole host of other stuff.
From a company valuation perspective, the customer is king, and the more customers you have the more the company is worth.

I believe that we are moving to a model similar to cable, where the customer buys a package of services and potentially has some pay-per-use capability in there for high value events, but the era of tracking every message sent between users is nearly over (unless government regulation prevents its demise).
P2P communication is flat-rate, and possibly free (if you believe Carphone Warehouse advertising!)

Anything else is just Ignorance-based pricing, tending towards Resentment-based pricing.

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