Mobile Networks Able to Vary Call Costs Based on Network Traffic Load

Ericsson has developed a service that allows mobile phone users to get discounts on mobile call rates based on the network traffic load at their location. Designed in Africa to make communication more affordable for users in low-income markets, Ericsson's Dynamic Discount solution is now generating interest globally.

Ericsson's new solution gives consumers the opportunity to see the discount currently available at their location on their mobile phone's screen in real-time. People using this solution can receive call discounts by calling during low-traffic periods. Ericsson said that the Dynamic Discount solution is available to any subscriber charged in real-time, whether pre-paid or part of a converged charging system. Consumers can activate the solution by simply punching in a code.

Experiences from different markets have been positive. An African operator reported rapid uptake, with two million subscribers using the service after only two months, corresponding to 60 percent of the operators' total subscribers. At the same time, usage increased by 70 percent.

With operators around the world facing a harsh financial climate and increased competition, the solution is also gaining interest in mature markets.

Jan Wäreby, Senior Vice President and Head of Multimedia at Ericsson, says the innovative solution marks a shift in application development: "The Dynamic Discount solution was created in one of our Innovation Centers in South Africa, and has been launched commercially by 14 operators with great success. We see great opportunities in bringing applications that have been developed in emerging markets to the rest of the world. Operators in mature markets can use these applications to tackle their own financial and competitive challenges."

The Ericsson mobile Innovation Center was founded in 2008 to develop mobile applications focusing on meeting the needs of poor and rural populations. Today, the center is getting global attention as more of its applications are proving suitable and beneficial for mature markets and developed countries as well.

Dynamic Discount solution lets operators discount call rates based on traffic in a particular cell, introducing a completely new way to price telecom services. Operator benefits include reduced churn and network congestion, and increased total revenues from existing network infrastructure investments. Improved quality of service benefits both the operator and the consumer.

Ericsson works continuously with operators to identify business opportunities and develop solutions that address the specific needs of users in emerging markets. Operators addressing this segment face challenges due to low ARPU, price-sensitive consumers and barriers to entry resulting from price of calls.

Posted to the site on 23rd June 2009