Customer friendly, good for acquisition and churn reduction
Hard to plan network capacity
Will be a real differentiator in the future
Expensive, if data usage continues doubling on a yearly basis
Provides some capacity planning
The limit tends to change often, as the ratio of abuser vs. Heavy users goes down.
No revenue leakage
Not customer friendly
Easy network planning (max capacity needed = max number of users x caps)
Does not allow to capture additional revenue
Hard cap with overage fee:
Can be very profitable with a population that has frequent overage
Many customers complain of the bill shock.
Customer friendly, easy to understand
Not as profitable in the short term
Soft cap with throttling
A better alternative to hard cap in markets where video usage is not yet very heavy
Becomes less and less customer friendly as video traffic increases
Very effective for charging per type of usage and educating customers
Requires sophisticated network (DPI + Charging + subscriber management)
Popular in mature market with high competition, where subscribers become expert at shopping and comparing the different offerings.
Complex requires sophisticated network, requires good understanding of subscriber demographics and usage to maximize revenue
Very effective way to ensure that capacity planning and revenue are tied
Not very popular, as many subscribers do not understand Megabytes and how 2 minutes of video could “cost” from 1 to 10 times .
Content based charging
Allow sophisticated tariffing that maximizes revenue
Complex requires sophisticated network, requires good understanding of subscriber demographics and usage to maximize revenue. Technology not quite ready.
Time of day charging
For operators who have a “prime time” effect with peaks an order of magnitude higher than average traffic, an effective way to monetize the need to size for peak.
Not very popular. The network is still underutilized most of the time.
Location based charging
Will allow operators with “hot spots” to try and mitigate usage in these zones or at least to finance capacity.
Most subscribers wont accept having to carry a map to understand how much their call/video will cost them.
As with many trends in wireless, it will take a while before the market matures enough to elaborate a technology and a business model that is both user-friendly and profitable for the operators. Additionally, the emergence of over-the-t0p traffic, with now content providers and aggregators selling their services directly to customers, forces the industry to examine charging and tariffing models in a more fundamental fashion.
Revenue sharing, network sharing, load sharing require traditional core network technologies to be exposed to external entities for a profitable model where brands, content owners, content providers and operators are not at war. New collaboration models need to be thought of. Additionally, while the technology has made much progress, the next generation of DPI, PCRF, OSS/BSS will need to step up to allow for these sophisticated charging models.