Operators’ IDD pricing strategies

on 06/02/2008
in

 

In the last couple of editions of a Daily Mail National UK Newspaper, T-Mobile has been advertising its Business 1-Plan offering with the headlines:  

  • Get double minutes for the length of your plan (this applies to those that commit to a 24-month contract)
  • Calls to the US and Europe as part of your minutes (both to landlines and mobiles, share minutes, texts and data bundles between colleagues
  • Free handset

Plans are available from GBP 10 per month to GBP 2,000 including 250 minutes and 50,000 minutes respectively. 18-month contracts offer 25% more inclusive allowance and 24-months double.

 It is interesting to note that operators increasingly allow users to use the inclusive allowance to make international calls. At BroadGroup’s recent pricing workshop, we looked at strategies for international calling (outbound) adopted by operators. This segment still represents a small proportion of the total minutes, but is likely to be on the increase. Ofcom’s latest statistics revealed that the average usage of a fixed bill has 294 minutes of which 10 minutes are international and the mobile bill is 102 minutes and 1 minute of that is international calling including roaming. In the UK, the revenue from fixed IDD is GBP 0.6 billion compared to GBP 1.6 billion from domestic calling and GBP 4.5 billion from the revenue generated from access.

The IDD segment will be growing and attractive offers will be launched by operators. The ethnic communities have increased over time, e.g. in Switzerland, 1.5 million of the 7.4 million inhabitants are from the ethnic community. In the UK this segment represents 8 million, 13 per cent of the population. We will also see price reductions on key routes, - differentiated billing increments can help to achieve very low headline rates - and certainly there will be a move towards the flat rate approach especially for fixed IDD, such as the plan ‘Talk3 Global’ from UK service provider Carphone Warehouse offering unlimited calling national, and international calling to 36 destinations, as well as discounted pricing to call other international destinations, this plan is available for GBP 10.49. A recent BroadGroup survey revealed that bundling and add-ons are on the increase, e.g. French mobile operator SFR offers the option ‘Europe & Maghreb’ for Euro 7.53 including 30 minutes of calls to Europe or 25 minutes of calls to Rest of Europe & Maghreb. Vodafone Ireland offers an anytime calling international mobiles and landline calls in the UK, Near, Mid & Far Europe, USA, Canada, Australia & N. Zealand bundle for Euro 10.74 including 60 minutes.

Competition from VoiP offerings have just began with the launch of network operator 3’s Skype offering. In the UK 3 offers 5,000 of IDD calling free of charge as part of its price plans where as in Austria, the user pays an additional fee per month to benefit from the free IDD calling.

Trends
Examples
Family and Friends
Batelco (Bahrain) offers 8 per cent on 3 IDD numbers.
 
TalkTalk UK offers discounts up to 16 numbers of which 6 can be international landline & mobile numbers, the discount for international number is 10 %.
Domestic plans include IDD or and roaming
Eircom Talktime International with 100 evening and weekend minutes per month to landlines in 40 countries (allowance, special discounted rates apply).
Bundles/add ons
1 country plan Euro 1.70, 2 country plan Euro 4.50.
Happy Hour Plan Euro 2.40. Free calls to Canada & USA every Sunday between the hours 2100-2200.
Mobile operator 3 Australia offers a bundle for AUSD 6.82 including 100 minutes to UK fixed numbers.
Flat rate
BT’s International Freedom Calls up to 1 hour at no extra cost – 36 destinations GBP 5.00 per month Calling 7 further countries at lower rates, plus set up of 6 pence e.g. Bangladesh.
Fixed:
German operator Arcor offers a Flat Europe rate (25 EU Countries) for Euro 3.95 and a Flat International rate (EU, Asia & S. America) for Euro 14.95.
Mobile:
T-Mobile Germany’s Option Turkey is available for  Euro 2.50 per month offering calling Turkey for Euro 0.29 per minute
On-net community pricing
Vodafone Passport, Like Home from operator 3, CelTel Africa
Price reductions
MVNO Yallo, calls up-to-now were charged at prices of CHF 1.80 or CHF 3.50 per minute. The most expensive band CHF 1.59 and band 1 and 2 are CHF 0.39 and CHF 0.59 per minute.
Time specific
Relax Holiday from T-Mobile
‘Free’ IDD
Skype offering from operator
In Austria:
As add on for Euro 4
UK:
Included in price plan
18-month tie-in.
A Fair use policy of 5,000 minutes applies in both countries

Source: Tariff Services' IDD Tariff Tracker