Speed-based vs. best effort tariffs: What sets them apart?
In the competitive world of FWA services, providers have two primary options to structure their tariffs: speed-based and best efforts . Speed-based tariffs showcase the marketed speed within a contract, appealing to end-users seeking transparency and reliability. The marketed speeds for FWA follow similar pattern as local regulatory requirements for fixed broadband services. In some cases, operators advertise average speeds and in some markets maximum up to speeds. On the other hand, best effort tariff plans focus primarily on volume based plans (e.g., allowance of data usage of certain GB per month) and in some cases unlimited offerings.
At Ericsson, we recommend the adoption of speed-based tariffs, emphasizing the appeal of presenting 'up-to' speed values in contracts. This recommendation stems from the observation that end-users are more drawn to plans that clearly define potential speeds, aligning with consumer expectations and building trust.
Speed-based FWA connections open doors for effective marketing strategies, allowing providers to target verified locations by considering network capabilities and dimensioning in specific geographic areas. This strategic approach ensures that offerings are tailored to match the unique requirements of different locations.
A key advantage of speed-based tariffs lies in their ability to capture different pricing tiers within the market. Service providers can diversify their offerings with varying prices and speeds, appealing to a broader range of consumer segments. This pricing flexibility enhances competitiveness and market reach.
An exemplary illustration of speed-based pricing models can be seen in Omantel's approach. Omantel utilized multiple speed tiers to precisely target and segment the market. Users have the flexibility to choose from various maximum speeds that align with their individual requirements. Additionally, there's a premium, high-speed offer tailored for professional streamers and similar high-demand users.
According to the latest Ericsson Mobility Report June 2023, over one-quarter of FWA service providers now offer speed-based tariff plans (also referred to as quality of service, or QoS). The remaining three-quarters are still best-effort, with volume-based tariff plans (buckets of GB per month). There are large regional variations in the proportion of service providers adopting FWA. As seen in the figure below, 84 percent of mobile service providers offer FWA in Middle East and Africa region, and 14 percent of FWA is speed-based.
Figure: Regional FWA service provider adoption, EMR June 2023
Aligning with Fixed Broadband Services (FBB): A parallel approach
It's essential to recognize that FWA falls within the domain of fixed broadband services (FBB). Typically, Speed-based tariff plans are commonly offered for fixed broadband services such as those delivered over fiber or cable. This type of plan is well understood by consumers, enabling service providers to monetize FWA as a broadband alternative.
In conclusion, understanding and strategically implementing speed-based tariffs in FWA service offerings can significantly impact consumer engagement, targeted marketing, and pricing flexibility. By embracing this approach and aligning with established industry practices, service providers can navigate the FWA landscape successfully, ensuring reliable and efficient internet access for users across diverse market segments. Stay tuned for more updates on optimizing the world of connectivity!
Related links:
https://foryou.ericsson.com/fwa-registration.html
Podcast Bridging digital divide in Africa with FWA solutions - Ericsson
Omantel wins customers with Ericsson 5G Fixed Wireless Access
Extended-range mmWave 5G FWA case – UScellular & Ericsson
Smart 5G FWA deployment - Mobility Report - Ericsson
