Is ‘Sponsored Data’, the future business model for operators?

AT&T has taken the first step by introducing a new business model called ‘Sponsored Data’ for 4G subscribers. The company has unveiled a new way for eligible 4G customers to enjoy mobile content and apps over AT&T’s wireless network without impacting their monthly wireless data plan.

Similar to 1-800 phone numbers or free shipping for internet commerce, AT&T’s new ‘Sponsored Data’ service opens up new data use options for AT&T wireless customers and customer-friendly mobile broadband channels to businesses that choose to participate as sponsors. With the new Sponsored Data service, data charges resulting from eligible uses will be billed directly to the sponsoring company; the customer simply enjoys their content via AT&T’s wireless data network.

Customers will see the service offered as AT&T Sponsored Data, and the usage will appear on their monthly invoice as Sponsored Data. Sponsored Data will be delivered at the same speed and performance as any non-Sponsored Data content.

The Sponsored Data service allows sponsors across a variety of industries such as healthcare, retail, media and entertainment and financial services with the opportunity to better engage with customers and their own employees. This will benefit all these verticals as they now have a new medium for advertisements and this medium has a large base of mobile users, be it 3G or 4G subscribers.

Sponsors can provide many use case such as: Encouraging customers to try a new smartphone or tablet app; Promoting movie trailers or games; Providing patient healthcare support via wellness videos; Encouraging customers to browse mobile shopping sites; Allowing businesses with ‘Bring Your Own Device’ policies to pay for the data employees use for specific business-related apps and services; and Enhancing customer loyalty programs by providing sponsored data access to products and services.

Ralph de la Vega, president and CEO, AT&T Mobility said, “This is an exciting new opportunity for us and, most importantly, our customers.”

The service is easily integrated into existing platforms and services and will be available across many mobile devices and operating systems. Additionally, the unique developer portal website includes intuitive features which allow sponsors to manage their offers, check billing and measure impact of offers using a robust analytics engine.

Commenting on the new model Susan Welsh de Grimaldo, director, Wireless Operators & Networks at Strategy Analytics said, “Strategy Analytics has been recommending this type of innovative network solution that enhances the B2B2C role that mobile operators could play across a wide range of businesses, delivering a way to increase consumer data use without more money coming out of the consumer wallet, and for content owners and other businesses providing a way to encourage access to their content, online stores and websites.”

“We expect the initial adoption of sponsored data by developers, brands, and advertisers will be met with enthusiasm, although limited in the near term to small trials which will serve to validate its value to sponsors,” adds Nitesh Patel, director, Wireless Media Strategies (WMS) at Strategy Analytics.

Mobile data traffic on AT&T’s network increased more than 30,000 percent over the last six years and is expected to continue growing. Providing data via AT&T’s Sponsored Data service gives companies an effective way to reach consumers and expand engagement in the growing, mobile-centric landscape.

“The Sponsored Data model is just one way we’re helping companies tap into our network to offer differentiated experiences and transform the way they do business,” said Andy Geisse, CEO, AT&T Business Solutions.

The success of this model will depend on how quickly the industry comes up with measurement models and how effective these models are in future. One can also pass a small percentage of revenue to subscribers in the Sponsored Data model so that subscribers are encouraged to view sponsor videos.

It is too early to tell how effective is Sponsored Data but it is definitely going to stay.

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