T-Mobile To Slash Prices To Stimulate Mobile Data Growth
Tuesday March 4, 7:16 pm ET
Dow Jones Business News
biz.yahoo.com
LONDON -(Dow Jones)- German mobile telecommunications company T-Mobile International AG Wednesday said it will slash the cost of sending data by up to 70% to stimulate customer usage across its networks.
The move, along with new services and handsets designed to give T-Mobile users easier e-mail and Internet access, may put pressure on other operators to cut prices, as high tariffs have been considered one of the hurdles to greater use of data services over mobile phones.
T-Mobile Chief Executive Rene Obermann told a conference of journalists in London that the price cuts, which will be available on both General Packet Radio Service, or GPRS, and third generation, or 3G, networks, aren't designed to attract more users to its network, but instead to tempt existing users to access and transfer more data using their mobile phone.
T-Mobile wants data services, including texts, to account for 20% of its average revenue per user, or ARPU, in fiscal 2004.
He said the commercial impact of lower prices will be offset by increased usage of data services. "It will be overcompensated," Obermann said.
Nikesh Arora, chief marketing officer for T-Mobile, told the conference that the company will set the price for the transfer of data, such as downloading ringtones and accessing Web pages, at under EUR10 per megabyte in all of its markets, with no commitment required from the customer. He added that for consumers willing to commit to a contract, prices will be lower.
The cuts will take effect in mid-April starting in Germany before being rolled out across T-Mobile's other markets. A T-Mobile spokesperson told Dow Jones Newswires that data will be priced between EUR5 and EUR10 a megabyte. Contracts are to start at a monthly fee of EUR4.95 and include budgets from 1 megabyte - roughly 300 short e-mails and 1,000 t-zone page impressions - upward of data use for free.
The spokesperson said that the price cuts will, on average, reduce the cost of data services by up to 50% across Europe and 70% in Germany.
Exact details of pricing plans will be announced at the CeBIT technology conference in Hanover, Germany, next week. Obermann said he doesn't expect the price of sending multimedia messages, such as photos, to be cut in the near future.
Gartner analyst Jason Chapman said it is in all operator's interest for consumers to start using data services more frequently.
Chapman said: "Operators are just starting to feel their way with data services tariffs. There is scope for further reduction but it is difficult to tell how other operators will react."
T-Mobile's price cuts will be accompanied by the launch of three handsets to use its network in April - Nokia Corp.'s 3650 model, Samsung Electronics Corp.'s V200, and Matsushita Electric Industrial Co.'s Panasonic- branded GD87. The handsets, all with embedded cameras, will include a 'T' button which connects users to the t-zones portal similar to Vodafone Group PLC's Vodafone Live! handsets.
Further handsets will be released during the year, although the t-zones portal can be accessed from 95% of the T-Mobile handset range.
T-Mobile also said it will introduce video messaging and video downloads with audio capability over its networks in April. It said it will be the first operator in the U.K. to do this, although Hutchison Whampoa Ltd.'s 3 unit hopes to have 3G handsets with video messaging capabilities in the market by the end of March.
T-Mobile said it will also introduce film and shopping services to its t-zones offering in April and has signed deals with MTV and Universal Mobile, a unit of Vivendi Universal SA , to offer consumers the option of downloading music and movie clips to their phone.
The t-zones offering may tempt existing T-Mobile users to transfer more data, but analysts said it closely resembles offerings from other network operators.
Jason Chapman, an analyst at Gartner, said "It looks like Vodafone Live! Everyone's going to look at it and think that."
Chapman said that the video-messaging aspect of the service is an interesting reaction to Hutchison's offering, but said the service on the 3G network will be superior.
Additionally, T-Mobile said it will work with Research in Motion Ltd. to bring a new BlackBerry product to market. BlackBerry terminals enable users to access the Internet and e-mail remotely.
Company Web site: t-mobile.com
-By Nic Fildes, Dow Jones Newswires; 44-20-7842-9264; nicolas.fildes@dowjones.com |
