 Should wireless carriers protect residential voice subscribers from high overage and underage charges? Insights from the Canadian telecommunications marketKen Kwong-Kay Wong Telecommunications Policy, 2010, vol. 34, issue 8, 461-481 Abstract: Prior research suggests that wireless subscribers often overpay for their services due to subscription of rate plans that are not financially optimized. Some wireless carriers have responded by introducing a new type of plan called "Flex", which gives subscribers the best service rate based on their actual usage. In Canada, this kind of cost-minimizing plan is only available for 3G data service. Should it be extended to customers who are using the "bread-and-butter" voice service? To what extent do they select inappropriate rate plans? This paper explores these issues by analysing subscribers' rate plan suitability with a focus on their revenue implications. Based on a 44-month study of 8146 postpaid wireless subscribers, this paper reveals that optimal rate plan subscribers contribute approximately 50% less revenue than those with non-optimal plans. Wireless carriers should be prepared to sacrifice the short-term revenue in exchange of loyalty by having subscribers on financially optimized plans. Keywords: Marketing; Overage; pricing; Rate; plan; selection; Voice; Wireless (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:telpol:v:34:y:2010:i:8:p:461-481 Ordering information: This journal article can be ordered from Access Statistics for this article Telecommunications Policy is currently edited by Erik Bohlin More articles in Telecommunications Policy from Elsevier |
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