SOURCE: Camiant, Inc.

Camiant, Inc.

November 16, 2009 09:16 ET

Camiant Study Finds New Mobile Broadband Tariffs Can Help Solve Bandwidth-Value Gap

New Study Indicates High Interest From Mobile Broadband Consumers in Alternative Rate Plan Structures

LONDON--(Marketwire - November 16, 2009) - BROADBAND TRAFFIC MANAGEMENT 2009 -- Camiant, Inc., the leading provider of policy control and application assurance technology, today announced the findings of its latest study, "Rethinking Mobile Broadband Data Rate Plans" indicating that by redesigning mobile broadband data rate plans, operators will be able to help solve one of the industry's most pressing concerns -- the bandwidth-value gap. The study results point to a high level of interest by consumers in alternative rate plan structures to today's traditional packages.

The bandwidth-value gap is the growing disconnect between bandwidth demand and revenue growth. Estimates from Heavy Reading indicate that bandwidth on 3G mobile networks is growing by approximately 400% annually while the associated revenue from data services is only growing approximately 40% per year. Camiant's study has found that mobile data consumers were more interested in rate plans designed to control bandwidth and afford incremental revenue add-ons than they were in traditional "Cap + Overage" rate plans with strict usage caps with steep overage penalties.

The study was commissioned by Camiant and conducted by Heavy Reading in September and October 2009. 263 mobile broadband dongle users throughout Europe including UK, France, Germany, Italy, Spain and Sweden were polled regarding their preferences for various forms of rate plans.

Key findings are:

Consumers have concerns with "Cap + Overage" style rate plans

--  62% didn't know what their usage cap was
--  76% didn't know how much bandwidth they actually used
--  39% didn't know what happened if they went over the usage cap
--  45% were very/moderately concerned about exceeding the cap
    

When presented with four alternative rate plan structures and asked their preference -- "Cap + Overage" was least preferred by consumers. A plan that includes the same base package, charging the same effective rate for overage with the understanding that service speed would be low for any data over the monthly limit during peak hours -- generated more than twice the interest level:

-- EUR 20 for 3GB + EUR 20/GB overage                              16%
-- EUR 20 for 3GB + EUR 7/GB overage + peak bandwidth limit        35%
-- EUR 20 for unlimited low speed service                          23%
-- EUR 50 for unlimited high speed service                         26%

Many users were willing to pay additional fees beyond the base subscription for potential "extras":

--  43% of all respondents would pay EUR 5 in addition to base plan for
    unlimited usage of one specific application.  Of those that were
    interested, 90% said it was important that they select the application.
--  45% of respondents interested in a service that might provide lower
    speed at some point said they would be willing to pay between EUR 1 and EUR
    3 for on-demand higher speed "for a short duration (e.g. 1 hour)."
    

Other findings included results regarding casual use, application limitations and usage controls.

"The prospect that network growth could consume revenue faster than operators can generate it marks a new phase in the industry's maturation," said Randy Fuller, vice president of Business Development at Camiant, Inc. "Our study clearly indicates that there are definite opportunities for mobile operators to use rate plan structures to help solve this problem and that users are receptive to creative alternatives."

By rethinking mobile data rate plans, operators can enable users to make value decisions based more in line with operator cost as well as directly address peak bandwidth utilization and the true cost of marginal network growth. Also, since operators can offer variable and ARPU-expanding options in search of market share growth rather than simple discounts, the potential occurrence of a profit-destroying price war should be reduced.

"It's becoming very clear that network operators need to offer a wider range of package options to users of mobile data users," said Graham Finnie, Chief Analyst at Heavy Reading. "This study provides strong evidence that end users are willing to consider a range of alternatives to conventional usage management schemes."

Operators around the world are already using Camiant's Multimedia Policy Engine (MPE) today to provide special bandwidth and rating offers to more finely target their market segments, and to dynamically manage network congestion in order to maximize network utilization.

Camiant's study will be unveiled on Monday, November 16 at Broadband Traffic Management 2009, where Camiant's Randy Fuller and Pal Zarandy, Senior Partner, Rewheel lead a highly interactive Pre-Conference Workshop 'Comparing Notes on Bandwidth Management Techniques in Fixed and Mobile Networks Around the World' along with Mohammed Sheikh, Director of Strategy, Zain Africa and Janos Jenei, Program Manager, Vodafone Hungary.

To schedule a media or analyst interview with Camiant or to receive the complete study, "Rethinking Mobile Broadband Data Rate Plans" please contact ilona@abelsongroup.com. To learn more, please register for the November 17 Light Reading's Virtual Tradeshow on Policy Control and Deep Packet Inspection.

About Camiant

Camiant's policy control solution, compliant with 3GPP*'s Release 8 Policy and Charging Rules Function (PCRF) specifications, empowers broadband service providers to dynamically manage their networks, ensuring efficient and high quality delivery of broadband data services, IP based communication services and rich media content. Network operators worldwide leverage Camiant's policy expertise to deliver high value applications and services while containing capital and operational costs associated with the growing demands of a broadband infrastructure.

Camiant's market-leading Multimedia Policy Engine is the policy control solution of choice for over 25 fixed and mobile broadband operators worldwide including Comcast, Cox Communications, Kabel Deutschland, Sprint, and Vodafone Hungary. For more information, visit http://www.camiant.com or follow the company on http://twitter.com/camiant.

* 3GPP is a registered trademark of European Telecommunications Standards Institute.

DOCSIS® is a trademark of Cable Television Laboratories, Inc.