Friday, February 26, 2010

Time-based vs. Volume-based Pricing

For Thai market, awaiting for 3G auction, data service is quite new to majority of users. It's actually also new to operators since there are two camps for the data service charging scheme. One is Time-based, where customers are charged per minute. Another is Volume-based, where customers are charged per megabyte.


Time-based 
This one is the scheme that customers are familiar with. Similar to the way they are charged on voice calls. It is easy to understand how much they have consumed. But when customers are charged with time-based, they are not quite encouraged to use data service because turning on the Internet connection means money. Therefore, most of the time the Internet is turned off. The browsing can wait!

Volume-based
Most users, even the experienced ones, do not know how many megabytes they would need for their next sit and surf. Estimation is not easy. Rich content web pages, You Tube streaming, and browsing the recent photo updates of your friends in Facebook could give you a surprised number of megabytes. In the early stage, operators might try to avoid this charging scheme since it's hard to understand to the users (and probably the operators themselves.) The good thing about the volume-based is the "Always On" experience (also called the broadband experience.) While most of the time customers don't use the Internet, they always want to get connected. So their friends can see their status on mobile instant messaging, chat whenever they want, search whenever they need, read.., browse.., purchase... and so on.

In sum, if the Google Chrome OS's vision (shown in the video below) is to be the future of computing/mobile... we couldn't avoid Volume-based charging or, to the utmost, Flat-rate.

3 comments:

  1. telstra australia do the "speed based pricing"

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  2. Congratulations! You've just posted the first ever comment in this blog since it was established. Thanks for the comment. I'll work on the speed-based pricing scheme and get back to you later.

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  3. And here is the second comment. I agree on the time based charging to be much easier to calculate but the problem with it is that experienced users can abuse the network. Some measures shoyuld be taken like throteling the speed if download protocol is used ... anyway thanks for the good post and I hope you can add more to the same topic!

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