Sponsored data and the idea of rewarding mobile users with data for was a key theme of #MWC17 – here MEF Member, Syntonic shares a brief history of the model and how it has evolved to its present state, and what the future has in store…
In the beginning, there was mobile voice calling. The natural currency for voice was measured and sold in “minutes.” That made sense to consumers and operators.
The next wave of mobile innovation was text messaging where the obvious currency was the text message. Each text message was ascribed a value, and like voice minutes, consumers understood the currency. It worked for the industry.
When data was introduced, some metering quantity was needed. Given the bursty nature of access, “time” wouldn’t work, nor did it align well with operator costing. Instead, the access currency that was introduced was the megabyte.
This pricing model was largely accepted despite the fact that consumers had no clue what they were purchasing. What’s a megabyte of data? Despite the consumer confusion, all was good for the mobile industry.
But with the introduction of smartphones and app stores the data plan began to look more inappropriate. Mobile phones were no longer pure communications devices. They became instant connection devices that provided access to all of the world’s knowledge. Apps became central to the experience.
The mismatch between megabytes of data and what consumer valued – apps and services – has become more glaring over time. Consumers don’t value bytes, they value access to friends, family, sports, entertainment, news, weather, and games.
As a consequence, the real value in the mobile ecosystem started to shift from the network operators to the service providers, a stark transition where apps supplanted bytes as the most valued mobile currency.
Adding to the shift from bytes to apps the carriers lost their previous sustainable advantages and differentiation as networks and operations evolved. There’s increasingly little difference in coverage, speeds, and customer service.
MEFTV speaks to Gary Greenbaum and CTO Rahul Agarwal during MWC17
That has only left data pricing as the remaining means of differentiation. Flattening or declining ARPUs and churn highlight the challenges operators face of competing on price alone.
This history of voice, text, and data commoditization is happening globally, but the trends are at different stages based on regional economic development. In emerging markets, we are far from market saturation for access and data commoditization. In developed economies data is now a commodity.
But all over the world the value layer is shifting from data to the services layer and many of the world’s leading mobile operators are now reinventing themselves as content providers. Sponsored data is one of the new models that has emerged.
Sponsored data – sometimes referred to as “zero-rated” data – allows consumers to explore and experience apps without impacting their mobile data plan. Sponsored data is free of consumer data charges. A sponsor pays for the mobile data on behalf of the consumer, which helps the sponsor acquire, engage, or monetize the consumer. Sponsored data reduces friction, is app and content specific, and is easily targeted to reinforce consumer behaviors.
Sponsored Data helps everyone in the mobile ecosystem – mobile operators, app developers and consumers – make the transition to an application and services economy.
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