Operators agree mobile content must pay its way

28 Feb 2012

LIVE FROM GSMA MOBILE WORLD CONGRESS 2012: Mobile operator execs today said the industry needs to change user perceptions and the way mobile content is paid for after giving too much away in the past.

“We have to come to terms with the reality that we may have spoiled consumers by giving things away too fast. And that’s not an easy thing to come back from,” said Telefonica Latin America chairman and CEO Santiago Fernández Valbuena in Tuesday’s keynote. Bharti Airtel chairman and MD Sunil Mittal noted that this practice has led to operators being viewed as the “bad gatekeepers” when services don’t meet expectations. 

“The fact is that nobody really sees it from the other way – that YouTube is consuming massive amounts of bandwidth on the network. And somebody has got to pay for that. If Google, Facebook and others are not going to pay for it, it will be transferred entirely onto customers,” Mittal said.

VimpelCom CEO Jo Lunder said consumers need to be re-educated about the cost of services. “Now the challenge is really to make them understand that if you want higher quality [or] higher speed, you pay more but you’re going to get it,” he said. He added that tariff plans will change to more accurately reflect resources used by addressing speeds and volumes.

But over-the-top (OTT) players also need to play a role, according to Mittal. “If we have to build the highways, there has got to be a tax on highways. You cannot have automobiles running on these highways which are paying nothing,” he said.

One approach could be to impose interconnect charges on OTT services to allow operators to make pricing more reasonable and fund spectrum and network investment. “We need to open up a debate for the right model,” Mittal added.

  • Federico Mallo

    Interesting…It is like watching TV, and pay to the owner of the airwaves for the amount of time we watch and pay also a fixed amount for the right to use the TV. Phone companies are getting paid either a fix amount of money per month or paid by usage. All this money is coming from the users. Now they want to charge a little (?) extra. It is reasonable to charge more for customers who use more bandwidth. But phone companies are willing to reduce the price for those who use less?

  • Aaron Hanisch

    I agree to a certain extent that internet data services should be paid for… however I stand at a disagreement with the ideas presently employed by some carriers as to upper limits of data and throttling such as slowing down access speed if a customer goes over, say 3GB in a month. While there may be practical considerations involved with having tremendous volumes of data flowing across a wireless network, it should also be noted that, after all, we are evolving to higher-capacity technologies, such as HSPA, LTE, etc. As with that old saying “if you build it, they will come” this is very true in the world of wireless data, and I don’t believe that we should get in the habit of restricting users after a certain volume of data has been exceeded. Wireless access to the Internet is becoming increasingly common and will probably be a defacto standard of internet access within 10 years. While I see tiered rates for throughput / download speeds as a possibility, I believe that data “caps” are completely antithetical to the way the Internet is used. We need to get used to the fact that much is asked for, when much is offered. When LTE starts giving large groups of people access to 100Mbps data speeds, you can bet there’s going to be a lot of people downloading HD movies to their tablets. Wireless is evolving into something that is no longer a “premium service” – as envisioned by the early work in GSM. It will be standard, and it should be marketed and priced as a standard service. That will increase customer base, and revenue, and so on. In my humble opinion….

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Justin manages the editorial content for the Mobile World Live portal and award-winning Mobile World Live TV service. In the last few years Justin has launched and grown a portfolio of premier media products, which include the Mobile World Congress...

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