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As sophisticated mobile devices and applications become more readily available, users of all types are embracing mobile data services with great enthusiasm. Increasingly, however, they are also experiencing—or hearing reports of—mobile bill shock: a term that describes the unpleasant and angry reaction of subscribers to unexpectedly high mobile data bills. Mobile bill shock results when subscribers use more data and roam more frequently than usual without having a clear understanding of how much their mobile operator charges for these activities. Not surprisingly, these dramatically inflated bills cultivate a negative attitude among subscribers at a time when operators cannot afford to lose them, or see usage decline among their highest ARPU-generating customers.
For many subscribers, mobile data services have become as essential as voice services and are a major driver in the choice of operator, plan, and device. Subscribers increasingly opt for the richness of data applications to keep in touch with family and friends, to be informed and entertained, and to help them perform their jobs more effectively. But while it’s easy to keep track of voice calls—essentially, how much time you have spent on the phone—monitoring data usage is more challenging.
Data applications differ significantly in terms of the bandwidth they use and, unlike voice, the amount of time subscribers spend online is a poor indicator of the actual capacity being used. Subscribers typically have no idea how much bandwidth they are consuming, how close they are to exceeding their monthly data allowance, and what impact their activity will have on their monthly bill. As painful as bill shock is for unsuspecting subscribers, it is also proving to be a major headache for operators as they attempt to deal with a range of repercussions including unhappy customers, increased churn, class action lawsuits and government regulation.
This paper highlights the challenges facing subscribers and operators in an environment where data traffic is rising more sharply than data revenues, and where regulatory pressure is pushing mobile operators to introduce transparent communications around data usage, and to adopt new approaches that will enable users to self-manage data traffic usage on mobile networks. The paper also proposes a solution to the problem of mobile data bill shock – allowing operators to meet these new challenges and, in doing so, to differentiate their service offerings through a more personalized mobile experience.
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