Many years ago, in the year of 2001, there was Genie, the mobile internet portal by BT. Genie was an attempt by BT to unify various global brands into one as well as address the mobile internet. In the UK it was BT Cellnet, in Germany VIAG, Telfort in the NL and Digiphone in Ireland. Nowdays after change of ownership it is known as O2.
When I met the Chief Data & Marketing Officer of O2 and President of Genie, a long time ago, his vision was clear: data is data, and kilobytes are kilobytes. Just as customers pay the kWh cost for the electricity used to power their fridge or TV, mobile internet customers, he believed, should pay for the data they consume. To make life simple, the cost of each KB should be the same, whatever the customer is using it for.
I was hooked. This felt so good, like the feeling I get prior to making a smash in tennis. Yet there was some degree of doubt. So I asked the guy softly, if you are going to charge for a banking balance query say £0.80, and it usually comprised of 80 bytes, that means 1 byte costs £0.01. Would that mean when I download a 100kB web page, I should pay £1,000?
You would agree there was no point to continue the discussion. After all I was a vendor, he was a potential customer and a popular keynote speaker. So even though it is a vivid case of a fundamental flaw in the business model, it was not my role to confront him with blunt questions. The end result of Genie is history.
The one guy that made money from Genie, and similar failures along the way, is Matt Haig. He wrote Brand Failures: The Truth about the 100 Biggest Branding Mistakes of All Time.
Let’s take a step back and discuss the telco business as a business with the objective to make money, or at least not to loose money. Whose role it is to make sure that the marketers come up with the right tariffs? As a good and old friend of mine once said (when he was still a Billing manager), “every time the marketing guys get drunk, I have a new tariff”.
I would like to think we can all agree, that when the tariff is wrong, and costs the business money, that finding leakage related to the tariff is less important than understanding why the business chose a bad tariff to begin with. I’m quite puzzled by the fact that I can’t recall a single telco where RA helps to evaluate which tariffs to launch and which tariffs to scratch.
I can vividly remember having similar discussions with the Executives at Vodafone UK, around the same time. My direction was to charge by the value and not by the kilo (or kilobyte), for downloading content. In the end, a flat rate for data usage was adopted because it was easily understood by the consumer. This was, however, a missed opportunity if you ask me.
More often than not, tariffs are always down to a commercial/marketing decision even if they are a loss leader, but is this a matter for revenue assurance??