There is a fallacy prevalent in the service provider industry that complexity means choice. The tradeoff, so the thinking goes, is between one-size-fits-all plans, such as a flat rate or unlimited plan, or deeply complex pricing plans rich with features and nuances that no customer will ever unravel on their bill.
“You were charged for XX gigabytes, except for Facebook, which wasn’t charged, except for when you shared it with your friends and you were charged for a bunch of bytes that somehow relate to your photos and videos depending on resolution and frame size.”
This is, in fact, one of the fundamental shifts in internet commerce. Prevailing commercial models either simplify with transactional pricing, à la Amazon, or with behind-the-scenes monetization of valued personal details, a practice which is now under scrutiny.
A new model is about to emerge. Digital commerce in the 5G era will be based on both simplicity and choice. And, with simplicity also comes transparency.
The aptly named Visible, just launched by Verizon, charges consumers $40/month, and the bill they receive is… $40 per month. Before you remark on the obviousness of this statement, I will share that I literally just purchased a $40/month price plan from a standard operator and my first bill just arrived charging me $73.07. Seasoned telecom pricing experts will argue, “ah yes, but that’s your first bill. First bills are different!” To which, I should reply, that this need not be so and that the extra charges equating to nearly double the price quote do not relate to prorated charges from a partial period. These charges are apparently for “smartphone line access and total equipment coverage” as well as surcharges, taxes, and fees. I hesitate to ask if I can get the $40 plan without “total equipment coverage.” Would my phone still work?
Enormous social changes are impacting the ways consumers and business customers use digital devices via connected networks. How are the patterns, usage and value of a teenager accessing Wikipedia for homework, a self-driving car receiving real-time traffic updates, an industrial robot receiving new instructions on the factory floor and an executive placing buy/sell orders for stocks or watching updates on a real-time video similar? They may have little resemblance; however, the multitude and diversity of these services are the epitome of what digital commerce will look like for operators in the very near future — if not already. The same plan for these disparate audiences won’t cut it. Nor will any of these consumers settle for confusing and obfuscating details that preclude their ability to understand what they are paying or how it relates it to the value they receive from the service.
With 5G, operators can benefit from new options to run their businesses, if deployed wisely. This includes new network slices, elastic scaling of platforms and services, seamless interfaces with systems extending beyond the traditional network and business-logic based solutions, rather than systems regularly needing code charges.
These benefits will be realized as operators transform their pricing models. Not to introduce complexity, but to embrace simplicity, in all its diverse forms. Through market segmentation, operators can avoid commoditization. And this, after all is said and done, will be the most important notion in a new age.