A new Ovum report suggests that mobile network operators must use price, quality and marketing to differentiate themselves from rivals.
According to the new report, ‘4G Best Practice: Operator strategy to launch 4G and stimulate mobile broadband usage’, offering unlimited data will not be effective in increasing subscription uptake.
Charging 4G at a premium to 3G to stimulate favourable perceptions among customers was also said to be ineffective. Faster download and upload speeds were seen as insufficient to justify charging a premium.
Accordingly, Ovum recommended that mobile network operators align their 4G rollouts with marketing to highlight its advantages over 3G. Crucially, operators must communicate the difference it would make and use the technology as a platform to reinvigorate the brand.
The report also recommended operators price 4G as closely to 3G as possible. To stay competitive, the most successful operators had evolved pricing by bundling more value with 4G subscriptions, gradually migrating subscribers to more expensive monthly plans with more data and content.
In addition, it was suggested that operators that lead on network quality can differentiate from rivals because the network quality has a direct impact on the user experience.
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Paul Lambert, Senior Analyst and author of the report, says, "Rather than this meaning operators can’t increase revenues from 4G services, there is evidence from leading 4G operators in the US, Korea and the UK that not charging a premium for 4G will increase data revenues. This is because the enhanced quality of the 4G user experience stimulates usage."
"Operators have to effectively communicate the enhanced network experience to end users. The most successful 4G marketing messages to date have communicated the speed advantages of 4G over 3G without highlighting actual download speeds, which is neither understood by all consumers nor is necessarily an accurate reflection of real-life network speeds," adds Lambert.
Lambert cited the example of EE as one of the most successful 4G operators. Cinema-goers will of course be familiar with recent advertisements featuring Kevin Bacon roaming around London using British vernacular for comic effect.
"EE in the UK is a great example of how an operator used its 4G launch to focus its market positioning around offering a premium mobile broadband experience, largely based on speed," says Lambert.
