In the center of Buenos Aires, the capital of Argentina, there is a "Avenue of the Ninth of July" that imitates the style of the Champs-Elysées in Paris, which has a total of 18 parallel lanes and is 148 meters wide, which is currently the widest road in the world. Even so, the avenue remains congested for a long time.
This story tells us that simply widening the road will not solve the traffic congestion, and it is also necessary to speed up the flow of traffic. It's like today's mobile network, where having enough "traffic" doesn't lead to a better experience, and you need to increase the speed of the network.
After the advent of the 5G era, "traffic anxiety" has become a thing of the past, but with the rise of emerging applications such as short video, live broadcast, cloud gaming, full HD, and the metaverse, we have a new "network speed anxiety".
From "traffic anxiety" to "network speed anxiety", it is just the inevitable change of times. In each era, there are also mobile network services that meet each era, and the opening of the "rate billing" model has become a timely need.
The origin and current status of "rate billing".
To put it simply, the rate-based billing model means that users choose different billing schemes based on their rate needs. Different rates correspond to different unit prices, and users can choose the appropriate solution according to their actual usage, and the higher the selected rate, the higher the price per unit of traffic.
This mode itself is very selectable and can be applied to many different scenarios. For example, for users who need to download or upload large amounts of data at high speeds, a higher rate can be selected for a faster web experience; For users who only need to do basic network activities, a lower rate can be selected to save money.
With the continuous development and popularization of 5G technology, the rate billing mode may become one of the mainstream billing methods in the future. At the same time, with the advancement of network technology and the change of user needs, operators will also introduce more innovative billing models to meet market demand.
In fact, the rate-based billing model was introduced to the market a decade ago. In 2014, operators in Finland implemented a rate-based billing model for the first time. This billing model has proven to not only boost mobile ARPU growth, but also enable operators to focus more on creating the best experience for users.
For example, in 2020, after the 5G commercialization in the Bulgarian market, rate billing began to be introduced, and from 2020 to 2023, the average ARPU increased by 8% and the DOU increased by 40%; In addition, the new rate package launched by the Dutch operator KPN in the first quarter of 2024 has achieved immediate results, not only adding 30,000 postpaid subscribers, but also increasing ARPU by 5% year-on-year.
For example, the Dutch KPN 600M package stipulates the downlink rate MAX 600Mbps and the uplink rate MAX 50Mbps. Secondly, it reflects certainty, that is, the minimum speed that can be reached after the mobile phone is accessed, for example, the Finnish DNA600M package agrees on the minimum speed of 10Mbps under the downlink rate 5G; Thirdly, it reflects the difference, users with higher rate packages have higher access priority, such as Sunrise in Switzerland and Deutsche Telecom in Austria and other operators give different user priorities to different rate packages.
What are the values for operators and users?
Through the above cases, it is not difficult to find that the rate billing model has become a recognized development direction in the field of operators. So what value can the rate billing model itself bring to operators and users?
As a new service model, operators can avoid traditional traffic price competition and explore new service models through rate billing.
On the one hand, the rate billing model can provide operators with differentiated charging strategies, and through different pricing at different rates, operators can better meet the personalized needs of users and formulate more accurate charging strategies for different user groups.
On the other hand, the rate billing model helps to improve network quality and user experience, and provides more favorable tariffs for high-speed networks. Operators can incentivize users to choose a more stable network, thereby improving the overall network experience of users. Not only does it help operators increase profitability, but it also increases user satisfaction and loyalty.
At the same time, the rate billing mode also helps operators better manage network resources and ensure network quality. This is because users will choose the appropriate rate according to their needs without over-hogging network resources.
For users, rate billing means the arrival of the era of personalization:
(1) Users can choose the appropriate rate according to their network usage habits and needs. For example, users who need to play video games, watch high-definition videos, and download large files can choose a higher speed package.
(2) Rate billing also helps users better control their network fees. By choosing the right rate, you can avoid unnecessary expenses and ensure that your expenses are manageable.
It can be seen that the rate billing model not only improves the service capabilities of operators, but also meets the needs and experience of users. It is foreseeable that the opening of the era of rate billing will inevitably be a win-win situation.
Why does the Chinese market need rate billing?
In the longer term, rate billing may bring more market effect and value than people think.
According to the data of the "2023 Communications Industry Statistical Bulletin", the annual mobile traffic revenue of mainland operators fell into a "flat period" after breaking through the 600 billion mark in 2019, and even the annual traffic revenue from 2021 to 2023 is almost flat, which means that the profit model relying on traffic has reached the upper limit, and operators urgently need to find new profit space by expanding new service models.
The rate billing model breaks the traditional "traffic sales" and rises to the value operation of traffic, realizing the change of traffic operation from "quantity" to "quality", and bringing an innovative business model of rate experience billing.
We say that innovation is often a closed-loop structure, and a breakthrough in one link is easy to drive all-round innovation.
In other words, the rate billing model is like a small "butterfly" that stirs its wings, which may stimulate more business innovation. After all, a lot of innovation in the past also stemmed from changes in network speeds. Before the generational change of the network, rate billing may become the "fulcrum" of business innovation.
Of course, whether the rate billing model can create a new era is the most critical factor in user choice. Undoubtedly, with the development and evolution of 5G network technology, users' demand for network speed and experience will continue to increase, and the growth curve of this demand is likely to accelerate with the advent of the intelligent era.
According to the changes in user demand, operators adjust rates and service strategies in a timely manner to adapt to market changes and user needs. In this sense, the launch of rate billing services is like an arrow on the bow and has to be launched.