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Business Impact

A Plan to Give Mobile Data Bills a Makeover

What if mobile subscribers could click a button and top off their data plan, or even buy mobile Internet access to a single app?

People are consuming growing volumes of media on their devices, but the costs are confusing and rigid.

Most people have enough to worry about without micromanaging their smartphone use, but that’s what it’s come to for many device owners. To avoid exceeding a data cap, and incurring a costly penalty, many people try to meter their phone activities or resist the temptation to click on that Pandora app or YouTube link near the end of a billing cycle.

Opera Software, the provider of a popular mobile and desktop Web browser, is developing an escape valve for this problem: an a la carte store for mobile apps and services with all the data you need included. The Norwegian company’s eventual aim is to provide its technology to major mobile network operators exploring more flexible and customizable data plans.

“Now, when you’re about to hit your [data] limit, there is no call to action,” says Jeff Glueck, CEO of Skyfire, the Silicon Valley competitor that Opera announced it would acquire for $155 million this month to work together on the plan. “You have to essentially change your contract.”

The idea is that a consumer could buy prepaid packages for data-intensive apps, like Spotify or Pandora; purchase data “top-offs” by the day or week as a plan runs low; and could opt to turn on file-compression services to make the most of the data they’ve got.

Launched in November, the service is called Web Pass, and its first focus has been in emerging markets, where people commonly prepay for mobile service and are just getting their first device capable of bringing them online. The Malaysian operator DiGi is already using Web Pass to help convince subscribers getting their first 2G network devices to activate data service, says Opera senior vice president for business development Per Wetterdal.

Web Pass helps by making it clearer what customers are buying and easy for them to act with a click in an Opera Mini browser. While a megabyte of data is not “a human term,” says Glueck, a day or week of Facebook is clear.

This Web Pass “1.0” version works only in Opera’s browser, which is used by more than 200 million people a month, largely in the developing world. For the time a Web Pass is valid, the browser routes network traffic through Opera’s virtual servers, which can compress the sizes of files to run on slower networks. Other companies like biNu and Blaast offer similar products (see “Making ‘Dumb’ Phones Faster and Smarter”).

A Web Pass “2.0” service targeted at U.S. and European markets is in the works but hasn’t yet been scheduled for launch. It would offer mobile Web access across an entire device, for any app or browser, says Wetterdal, and, like the current version, would require carrier partnerships.

One selling point to carriers is that it would also use Skyfire’s video optimization technology, which can check whether the video a person requests on a device can be loaded, given the available network bandwidth. If it can’t, say, in Times Square on New Year’s Eve, Skyfire can compress the video before delivering the content or give a warning to the consumer before he tries to play it.

Today, prepaid pricing is becoming more attractive to budget-conscious U.S. device owners; Glueck says a survey conducted by his company indicates that 10 to 20 percent of U.S. wireless customers have been charged for going over a data cap.

The time could be ripe for more “smart pricing” innovations, says Chetan Sharma, an independent consultant to mobile companies, though he is skeptical that major carriers would work with an outside company like Opera rather than creating a more tailored service themselves. While wireless carriers like Verizon and AT&T certainly make plenty of money from tiered data plans, they could respond if customers demand more flexibility, Sharma says.

There may also be new business opportunities for wireless carriers in a la carte data. Like 1-800 numbers or free airport Wi-Fi today, these companies have lately been exploring “toll-free” data models, in which content owners, developers, or advertisers could pay Verizon or AT&T for data charges on behalf of a given wireless customer. AT&T CEO Randall Stephenson has talked in the last year about being interested in these revenue models.

For years, carriers have tried and failed to differentiate themselves by offering their own music stores and other services, says Wetterdal. The analytics that Opera’s Web Pass offers would track how a customer is buying data for different apps or time periods. That data could allow operators to offer better promotions and even bundles of apps.

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