The “All You Can Eat” Question

I finally managed to listen to the podcast from the WeDo WUG that Eric posted some months ago. Towards the end, Eric asked me a question along the lines of “with pricing getting simpler, such as all you can eat bundles, what does that mean for RA?”.  As I listened to the podcast, I wasn’t convinced with my response, and so this blog gives me an opportunity to add to that answer.

On the WUG, I mentioned that behind the $70 per month, unlimited usage, plan, there would be all sorts of partner agreements that need assurance. There is some validity in this comment and it does bring RA to a margin analysis activity. However, I also think my answer was based too heavily on telco revenue streams as they have been over the last ten years, and not what they may look like in the future.

As I dip into this topic, let me make an assumption that we are discussing here the consumer, mass market customers; as this is most likely to whom these pricing constructs will apply. If so, then the telco that is content to collect $70 per month and essentially act as the “dumb pipe” is not the telco that is likely to survive through the significant disruption that digitalisation of business will bring. Telcos continue to search for new products, new partnerships, and better ways to personalise and improve the customer experience. And this, I feel, is where the new battlegrounds for revenue assurance will emerge.

It’s not the $70 per month that RA will need to worry about as controls on that can and should be automated. It’s assuring the small and incremental spend of each customer,  where offers are individually tailored (welcome to the world of Big Data) and purchased in real time, that will make the difference to the winners and losers in the market. Getting that right is going to be key. RA has always played in the crucial 1%s of an organisation’s revenue and it is that 1% that can mark the difference between profit and loss.

Mike Willett
Mike Willett
Mike is a Director at Ernst & Young, Australia. He is responsible for enterprise intelligence, helping clients to improve their management and use of data. He can be contacted at: mike.willett@au.ey.com.

Mike was previously the Director for Fraud & Revenue Assurance at Telstra. He started his career at BellSouth (now Vodafone) in New Zealand and then moved to Praesidium Services in the UK. Mike graduated from the University of Auckland in New Zealand with degrees in psychology and marketing.
  • Michael Lazarou (ml)

    That 1% is often found in roaming, interconnect, or subscriber profile reconciliations – so even when we do reach the point were voice/sms is unlimited or bound to data exclusively, there will be a lot to look out for. Maybe one will argue back that the imminent mergers or consolidation of telco’s (or even the elimination of roaming withing the EU) will reduce the need of roaming/interconnect checks, however this is the future that we see given our current perspective – let’s see…

  • Mike Willett

    Thanks Michael, yes I agree with what you’re saying that tight margins will mean those elements that have a cash outflow impact will remain important (assuming we don’t also move to a bill and keep model).

    My thinking is, using an example, when a network sees a customer switch off data roaming when they arrive in a new country, and they immediately offer a data bundle for a fixed price based on their understanding of the customer. RA’s role may be "did we offer the right bundle to the right customer, at the right price point, and only then, did we charge it correctly".

  • Dumitru

    In North America we’re seeing less and less “all you can eat” offers. They may still be branded as “all included”, but the usage cap is pretty low. Currently for $70 the usage cap is 250MB with Bell
    (http://www.bell.ca/Mobility/Cell_phone_plans/Voice_and_Data_plans)

    I think RA had a very easy life until now especially around data services/product. Chances are that going forward the bundles will be app specific (facebook bundle, twitter bundle, youtube bundle), combined user policies that will monitor individual traffic patterns, pretty much like Mike says. When bundle runs out, user goes to a low priority level and bandwidth is throttled a X% etc…