Conflict Of Right Price Model For 5G

Telecom Business Review | Tuesday, April 27, 2021

Having the best pricing models and business infrastructure for the 5G offers; otherwise, it will become vulnerable to the wave of OTT players very soon. Let's have a look at different approaches for the right pricing model for 5G

FREMONT, CA: The transmigrating from 4G to 5G has already begun, and many forward-thinking telecoms have launched digital brands to run up full-fledged 5G layouts. The shift will follow in a sea change in how traditional telecoms work. With the freshly launched digital brands, telecoms are experimenting with customer experience, service offerings, and business models, which will go mainstream with 5G.

It is equally significant to have the best pricing models and business infrastructure to extract the value from the 5G offers; otherwise, it will turn vulnerable to the wave of OTT players very soon.

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To solve this, there must be a consensus on pricing the best for 5Gs. Some operators now offer 5G at no additional cost to their existing 4G plans. How long will they remain to provide the service for free, and is it feasible in the long term?

With several options available to the operators, let's discuss the three probable approaches for fixing the right price model for the 5G.

The Rewards Approach

Creating a value-added service to the present plan is an age-old approach to introducing something new in the market. They are often called reward-based programs or approaches, which incorporate discount coupons, access to movies, or concerts.

This maintains the user engagement high, and people generally stick to the operator, checking offers now and then. They have undoubtedly built a relationship between consumers and the brand; watching how long the operators can compete with the emerging OTT players is interesting.

The Pay-for-Speed Approach

Some operators have found a straightforward approach that values speed more than anything. As the name indicates, the approach is to have multiple pricing bases for diverse speeds, with the highest speed costing the highest. It lets the customer pick what speed they want and prefer to download or stream content and choose the plan accordingly.

Marketplace and Bundled Approach

Operators are now presenting opportunities for the users to connect with friends, gift data to friends, form private social groups, and manage their plans in real-time. It allows an operator to drive more customers to the marketplace thus created.

The bunched approach is a new one that allows customers to choose plans along with an exclusive service pack, e.g., a certain extra amount to the existing plan will trigger Netflix for a month.

It is interesting to notice how new operators are moving to innovate and differentiate themselves from their competitors, keeping the pricing models in mind. While all the offerings are founded on 4G today, they form the base of driving customers to create high-engagement fans and increase revenue.

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