Mobile operators wreaking havoc with pricing

At the ITSPA Summer Forum, held yesterday at Polycom’s City offices  there was a panel of VoIP wholesalers debating the health of the market. The panel consisted of representatives from BT, Gamma, X-Connect, Magrathea and Timico (ie moi).

The market it turns out is very healthy with everyone reporting growth in VoIP minutes over and above old fashioned TDM minutes. We also debated number porting – a large subject in its own right that has already featured on this blog but is going to be a lot more visible over the next few months.

One subject that caught me by surprise is the behaviour of mobile operators. They have a mandate to gradually reduce their prices but in doing this are indulging in some sharp practices. Whilst their pricing trend is downwards overall they are creating huge swings in individual route charges.

For example one month an operator might hike his prices up by 100% for some destinations at peak time and make the weekends and off peak very cheap.  The following month they will reverse this. This makes it very difficult  for their service provider customers to  keep on top of margins and leads to loss making scenarios.  The operators of course are making a killing whilst notionally following the Ofcom rules on price erosion because on average the prices are still going down.

Published by Trefor Davies

Liver of life, father of four, CTO of trefor.net, writer, poet, philosopherontap.com

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1 Comment

  1. This is the way many telco’s have operated since time immemorial.

    There are a number of small companies that have made massive profits from buying cheap capacity to location X and making a push on selling that location cheap using a time limited promotion then switching the prices high and catching out large numbers of subscribers who didn’t notice the end of the ‘promotional offer’.

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