Notwithstanding the number of times you have listened to ‘enlightening’ presentations on dominance of data, the reluctance of service providers to invest on infrastructure that compromises on voice ‘slightly’ while offering multiple data-based revenue sources proves one point. That voice still rules the market and will continue to do so in the near future.

The operators, while trying to improve the bottomline, cannot afford to ignore the topline... the most common parameter of measuring an operator’s performance is still ARPU.

So we have a situation with voice providing 70 percent of the revenues, but with little scope for differentiation and data-centric services filling that innovation gap with new differentiated services. For the service provider, choosing between the two is not a viable option.

So what is the solution? Many operators have found one in a simple time-tested formula: minimum usage guarantee. This makes the service more economical for heavy users and unviable for infrequent users. So the less revenue generating customers either pay a little more or leave, taking up the ARPU for the service provider, in either case.

Many operators in the developed markets of North America and Western Europe have already started shifting to this strategy for voice. In Asia, SingTel Mobile offers a plan called Classic 100, in which a subscriber pays Singapore $30 as signing fee, a flat rate of $30 per month for a usage of 100 minutes of talk time (and 360 local SMS). Beyond this, he is charged at 15 cent per minute. Although the voice minutes are not unlimited yet, it is quite comparable to the way ISPs charged for dial-up access. There is reason to believe that the prepaid model in developing markets will also shift towards this model, once the initial market expansion phase is over.

This minimum usage guarantee based billing may grow to become unlimited voice once the revenue from data services surpasses voice with 3G wireless services. In other words, voice is becoming more and more flat.

On the other hand, data services like Internet access have traditionally followed the flat rate model. Take mobile data that is likely to become more and more pervasive. Today, the number of services available there is limited. This, however, is changing. Soon, there will be multiple services like e-mail and file transfer, information services, downloads, online games, and m-commerce services. The user could then be billed for various things like value of content (for specialized information), duration of download and/or size of download (for mass applications like gaming) and even the time of download (video of a sixer by Sachin will be more valuable immediately after he hits it than in the late evening)

Similarly, for the operator, some of the billing could be flat (personal messages), some could be transaction-based (downloads), some could be metered on time (online games), and some could be transaction based, the operator being just a collector (a percentage commission from a third-party application service provider). In other words, services and their billing parameters will have more and more permutations and combinations.

With more such services with differential rates, the user will need to know what he is paying for in his billing statement. This means that his bill could have just one entry for all voice calls and then go on to list different data services and the respective billing parameters and amounts.

In other words, data services will become more and more metered.

In other words, voice, a metered service traditionally, will be more and more flat and data, a flat service, will be more and more metered.

And what do you call the switch that takes care of all this? Value switch?

Shyamanuja Das