Right now your commercial customers are devouring data at the pace growing teenagers consume spaghetti: They just can’t get enough of it.
On one hand, this insatiable appetite for data and high-speed Internet service is great for your business. After all, the fact that customers are relying so much on your network means that you are in a prime position to rake in profits. What’s more, this trend will only increase as we move forward into the ultra-connected era of IoT technology, and business rely on a greater number of devices on a daily basis. Industry pundits, for instance, are predicting that by 2020, billions of ordinary objects will be connected to the Web. In fact, Siemens places this number at around 26 billion in total although this could be a low estimate. There’s no telling how big the IoT could become.
On the other hand, it’s not easy to keep up with such heavy demand for high-speed Internet and phone service. As customer expectations continue to increase—a trend that will skyrocket as we approach 5G connectivity and lightning-fast Internet service becomes the new service standard— traditional copper-based telecommunications lines will no longer be able to transmit data at competitive speeds. As a result, many telecommunications companies are slowly upgrading from slow copper-based wire systems to faster fiber optic systems that can transmit data at a rate of up to 1 gbps and offer a wider pipeline for data;. It’s the difference, after all, between sending data at the speed of electricity versus the speed of light. This global market will continue to grow at a steady compound annual growth rate of 5.1 percent from 2014 to 2019, where it will reach $3.0 billion.
The question therefore becomes: How can telecommunications providers profit while still making the costly network upgrades required to keep up with customer demands?
One answer may lie in tiered subscription-based billing models.
Right now, for instance, many telecommunications companies are losing money since they aren’t charging customers in a way that is consistent with the amount of data they are using. Most operators charge a fixed rate for their customers, which means that at the end of the day, profits are not as high as they could be. In short, broadband providers are overpaying to accommodate customers without being adequately compensated. This, combined with the high costs of managing a network, is why many telecommunications providers fail to profit like they should be.
In contrast, through a tiered subscription-based billing model, combined with usage-based billing, customers can select plans that better reflect their data needs. Embracing this strategy can help broadband providers fine-tune their product strategy, maximize their earnings potential and avoid the pitfalls of using outdated billing models.
So ask yourself this question: Are you in the best position possible to profit from your customers’ data usage habits? If not, it’s time to consider how a subscription-based billing service can help your business generate the income your company is capable of.