Where to go from here: monetizing the 5G consumer experience
In a blog post published earlier this year we discussed the importance for service providers to modernize their business support systems and processes to be ready to tap into the growth opportunities brought on by 5G. And while a big part of that opportunity lies in emerging and future use cases, we urged CSPs to act now and accelerate deployment of 5G-ready digital monetization capabilities.
Since then, we have seen the first commercial offers for 5G-based enhanced mobile broadband and fixed wireless access go live in various markets around the world, with several of those using Nokia’s Monetization capabilities. As expected in this early stage of the rollout, pricing and packaging of those early 5G consumer centric services doesn’t dramatically differ from existing offers based on 4G.
However, service providers are trying out different commercial approaches to accelerate uptake of 5G-based mobile plans. In some markets, 5G plans are available for the same price as similar 4G packages, with 5G sometimes restricted to the more expensive plans. Other service providers charge a slight premium for 5G. And in South Korea, pricing for a 5G mobile broadband plans is, in some cases, cheaper than for a comparable 4G plan, with providers in China announcing similar intentions. Some service providers used the 5G launch to introduce unlimited data consumption as part of their top-tier plans. In some of those cases, speed tiers are used to offer differentiation between different plans, in addition to service add-ons that are discussed below.
As expected, we have also seen many service providers adjusting their recently launched 5G service plans to react to the initial uptake, supported by a flurry of promotions to entice consumers to purchase 5G devices and plans. More granular offers are being launched to better target specific market segments. For example, there are specific plans for subscribers under 30, for users that mostly stream audio and video, or those mostly interested in productivity applications. Similarly, there is also an initial push to grow 5G-uptake for enterprise users by offering substantial device discounts and free service for a limited time.
This highlights the need to use flexible business systems that do not limit the creativity of product managers and marketing primes when they define, launch and manage plans and promotions, and allow them to bring them to market in a timely manner. Also, it highlights the need for better, more targeted sales engagements to entice a faster uptake of 5G plans. Many service providers need to further improve in those areas, even before 5G rollout starts.
As an example, Nokia recently completed a BSS transformation project for a customer in Southeast Asia and provided them with modern real-time charging, billing, CRM and product catalogue capabilities. In a highly competitive market, this service provider is committed to enabling a digital lifestyle for its customers as well as a digitized economy. In this industry, digital transformation projects are frequently challenged by cost overruns and delays; often they fail to reach their stated goals. For our customer, it was crucial that this project was delivered as planned. Following the successful completion, the service provider can now bring new services and promotions to market faster and differentiate better from its competitors. With the new solution in place, the company expects to grow subscribers and revenues by over 20% within a year, while preparing for the introduction on 5G into their market.
Pressured to find new ways to differentiate their consumer offerings in highly competitive markets, improving the experience of their customers must be a key focus area for service providers. Bundling partner offers with mobile plans remains a popular option, ranging from video and music streaming services to more unusual lifestyle options such as restaurant passes and free airport lounge access.
One universally popular add-on for 5G packages is gaming. Some service providers have launched gaming service add-ons under their own brand. Most are partnering with well-known gaming providers and many include try-and-buy offers bundled with 5G devices.
And while gaming is a great use case for 5G because of the strong dependence of the application on the network, it can be a tricky proposition at a time when the build-out of 5G networks has just started. This is evidenced by many reviews of gaming apps. “This is a good idea, but you really do need a very good connection to play” says one user of a gaming app and concludes “I got 3 months free through [my service provider], but I won’t be continuing the subscription when the free period ends.”
This highlights that differentiation through add-on packages like game streaming only works if the user experience is positive end-to-end, including the application experience, the network experience and the service experience. To learn more about this topic, read our recent blog that discussed the importance of a 5G-ready customer service solution.
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