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June 25, 2012

'Logical Bundles' Change Over Time

By Gary Kim, Contributing Editor

There once was a time when fixed network “dial tone” (the ability to use the network) was one product, and call waiting, voicemail and other features were add-ons. It was a time when “domestic long distance” was a different product than “mobile phone” or “fixed network” telephone service.

Today, many of those products are now simply “features” of phone service.

Something similar to that is likely to happen, over time, for the entire product we now call “voice service.” In principle, “voice” as a product might become a “feature” of some other product – the foundation broadband access product, for example.

The reason is fairly simple. Fixed network voice revenue and lines in service have been falling steadily for more than a decade. Nobody seems to have a coherent answer to what could be done to reverse that trend. Some suggest the general approach is to “add value.”

But it’s hard to ignore the argument that mobile voice is “becoming the preferred way” of using voice services, in which case “adding value” might not be so easy. Some might argue that high-definition voice, or video-based voice supply, add value.

Others say video-based voice is the next generation of voice services.

But there is extensive precedent for “features” to drive revenue elsewhere in the business. Once upon a time, it was widely thought that public hotspots would be a stand-alone access business. In some cases, it is.

For the most part, though, most Wi-Fi hotspot value is created when consumers sign up either for fixed network broadband or mobile broadband service that include the Wi-Fi hotspot access as an amenity, or feature. In other words, revenue comes from the “other service” to which Wi-Fi hotspots add value.

“TV Everywhere” is another example. A user must subscribe to a video entertainment service first, to get the TV Everywhere access on other devices.

Someday, service providers might simply bundle voice features with a broadband access subscription or video entertainment subscription. That’s essentially what Verizon (News - Alert) Wireless is doing with its “Share Everything” plan.

Charter Communications might take a half step in that direction  if it proceeds with a plan to halt sales of stand-alone voice, and sell only as part of a bundle with some other service such as broadband access or entertainment video.

Much will hinge on the overall packaging and pricing, but in principle, Verizon Wireless (News - Alert), for example, has essentially eliminated voice as a product and made it a feature of using its network. So voice now is a feature of “access.”

The point is that what consumers think the logical attributes of any “product” are can change over time. These days, consumers frequently consider unlimited U.S. domestic long distance and voice features such as voice mail “mere” features of a voice service.

In some later iteration, voice features and messaging might simply be features of a “network access” subscription.

Want to learn more about the impact and potential future of White Spaces? Then be sure to attend the
Super Wi-Fi Summit, collocated with ITEXPO West 2012 taking place Oct. 2-5 2012, in Austin, TX. Co-sponsored by TMC (News - Alert) Partner Crossfire Media the Super Wi-Fi Summit will address the opportunities, challenges and technical issues surrounding the use of White Spaces for wireless broadband services. The event will cover all aspects of the White Spaces market including, results and next steps for recent technical trials, White Spaces backhaul opportunities, database issues, White Spaces Devices, Spectrum (News - Alert) Issues, Standards and more. For more information on registering for the Super Wi-Fi Summit click here.

Stay in touch with everything happening at Super Wi-Fi Summit. Follow us on Twitter.

Edited by Braden Becker
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