Speed pays

If you have a need for speed in motor cars you buy a high performance motor with the associated price tag. You don’t expect to buy a Ferrari with a Fiat budget, right? And if you want economy motoring, you pay less for a less powerful motor, save money on gas and drive around sedately. So why do mobile broadband customers think things are different for them?

It can mainly be put down to mobile operators being so keen to drive data revenues by offering uncapped, all-you-can-eat plans at a time when network performance was not so hot and few devices were around offering anywhere near the experience that fixed broadband could offer.

Things have certainly changed with the advent of the PC USB dongles (modems), iPhones, tablet-like devices, HSPA+ and LTE networks. Operators hoping to capitalize on their large customer bases by offering value added services are constantly being challenged by over-the-top content and application providers, etc. etc. You know the story.

The first glimmer of operator logic came from Hong Kong mobile operator, CSL, when it announced publicly that its LTE network would be offered as a premium service. There would be no cannibalizing of its existing HSPA customer base and no discounted offerings to attract customers to the new platform. Speed and quality would come at a price. A bold move but probably the smartest considering the investments being made and the growing need to rely on bandwidth revenues as the main form of income.

The constant fear of becoming a mere ‘big fat pipe’ has generated a major rethink of how mobile broadband, a very limited commodity, can be best monetized. So, it was good to see that another leading Asian operator, SingTel announcing that it will begin prioritizing data traffic for its higher-paying users in a bid to cope with growing data traffic.

TelecomAsia reports that Singapore’s largest operator will, from 15 June, adjust its backend system to offer customers on higher-priced mobile broadband dongle plans more reliable surfing speeds during peak periods. I another bold move, SingTel has also published the typical speeds users can expect to achieve on the mobile dongle plans it offers, in line with the local regulator’s recommendations.

SingTel will be using probes across its network to measure speeds at which PC dongles, in given areas, access SingTel’s FTP server. SingTel has around 870,000 customers on its mobile broadband dongle plans, most of whom are on the entry-level plan, which will not enjoy priority access. No doubt, SingTel will be offering those customers the opportunity to move to higher-end plans in due course.

Customers using mobile broadband via smartphones are not included in this latest development because SingTel did not observe smartphone users utilizing a significant amount of data on average. The Insider is not sure what would stop users from swapping SIM cards over from one device to another and can only assume SingTel is able to monitor that as well.

SingTel may not be the first to move in this direction but it is certainly bold in making the first move in its market. It makes sense that users should pay more for premium service, but only time will tell if customers feel the same way.