BOSTON-The wave of flat-rate pricing plans carriers have been introducing during the last year has helped force the wireless industry to go after higher average-revenue-per-user customers, according to Kelly Quinn, a senior industry analyst at Strategy Analytics Inc.
“This runs totally contrary to the direction we’d seen the market heading prior to the introduction of the flat-rate plans,” said Quinn. The findings are part of Strategy Analytics’ latest pricing study, “1999 U.S. Top 20 Market Pricing Monitor and Operator Pricing Strategies Overview.”
Quinn said carriers previously had been chasing the less-profitable lower monthly service charges and higher bundled minutes combination. Flat-rate plans caused carriers to pursue higher ARPU customers, resulting in stabilized prices compared with 1998 averages, said the report.
Effective cost per minute, which takes into account base service prices, plus bundled minutes and activation charges, ranges from 12 cents per minute for high-end customers to 53 cents per minute for entry-level plans, said the report.
“While overall effective cost per minute across usage levels has continued to fall, Strategy Analytics asserts flat-rate plans have helped keep this downward flow in check,” continued Quinn. “Flat-rate plans have helped shift the consumer’s image of wireless back to one of a high-quality product that’s worth paying a moderate premium for.”
The report also discusses the introduction of a greater number of service plans that cover a variety of usage levels. Customers in the top 20 markets now can choose from plans starting with zero to 30 bundled minutes all the way up to 2000 bundled minutes, said Quinn.
The 1999 Tariff Monitor provides pricing plan information across the top 20 U.S. markets and examines trends from the last year. The report also compares average pricing by technology and bandwidth.
