TRENDS IN TELECOMS PRICING – NOVEMBER 1999
Competition, technology and changing calling patterns are all exerting a profound long-term effect on the once-sedate world of telecoms pricing. Current trends include:
- The ‘postalisation’ of long-distance tariffs via the introduction of a wide range of new, flat-rate pricing schemes;
- A move towards bundled service packages offering a mix of services, included fixed, mobile and value-added services such as voicemail or Call Waiting;
- The continued erosion of the international accounting rate system;
- A growing abundance of new kinds of tariff plans aimed at ensuring customer fidelity in volatile, highly competitive markets;
- The continuing decline in the cost of carriage;
- And the effects of the Internet and Internet telephony.
Current pricing forces at work indicate that within a few short years the pricing of telecommunications services may be a very different ball game. For a start, the trend known as the ‘death of distance’ may mean we’ll pay for standard telecoms services through a flat-rate (or even free) access charge, rather like today’s Internet subscription, rather than the usage-based charges which have traditionally governed telecoms service provision.
At the same time, discriminatory pricing is likely to become prevalent, segmenting the market into various service and customer categories so that few of us pay exactly the same price for the same service. In addition, it’s likely that a larger proportion of calls will be paid for by the receiver rather than the caller, using arrangements such as global freephone.
In the US, AT&T already estimates that around 40% of its domestic traffic travels to freephone numbers; now that the ITU has standardised freephone on a worldwide basis, there is no reason to believe it won’t prove as popular in other countries.
Finally, data traffic will be the dominant form of traffic on most telcos’ networks, and will largely be charged by volume rather than the time is takes to transmit the information.
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Tagged in: Global, North America
