Last week Verizon increased the cost and the size of their bundles. While service providers around the world are cutting bundle prices how can Verizon implement a price increase? Maybe something to do with having a churn rate that is less than 1%, and the fact that their pricing plans are built on the principal of shared data.

Seen as the norm in the mobile communications industry since 2013, Shared Data Plans are a huge focus for North American operators. The likes of AT&T, T-Mobile and Verizon have found that customers on shared plans such as family plans, business plans, group plans and multi-device plans are ‘jumping ship’ significantly less frequently than those on  the more ‘regular’ plan structures of the past. The reason being for this trend? More moving parts – with customers being less inclined to take steps to unravel their increasingly complicated contracts with their service providers. At the end of last year Verizon and AT&T had reduced their post-paid churn rate to .96% and 1.02% respectively. AT&T said churn levels for their Mobile Share, Family Talk and business plans were significantly lower than other post-paid plans.

In order to capitalize on this market trend, many operators have adjusted their data plans in the last year. For example AT&T have removed their 1GB and 3GB offerings and instead offer a 2GB plan –  clearly a pretty low data offering by modern day standards! Research has shown that customers are using, on average, 2.7GB of data a month in North America (April 2016). Clearly the 2GB plan isn’t going to suit the vast majority of AT&T customers, with their next tier plan offering at 5GB.

Here is where it gets interesting – two separate 5GB plans works out $20 per month more expensive than a shared 15GB plan. Removing the 3GB Tier and dangling this new 15GB Tier, AT&T are hoping that their customers grab that dangling carrot and join a shared data plan.

AT&T Mobile Share accounts totalled 20.7 million as of Q1 2016, with an average of 3 devices per/ac. Statistics further show 50% of Mobile Share accounts opting for heavy data packages of 10GB or higher, and almost 20% of Mobile Share accounts are on 15GB or larger data plans. Operators are offering competitive prices for higher data amounts, to get more devices/customers onto a shared data plan, making the plan stickier, reducing the chance of churn. The success of AT&T’s shared data plan is evident in their YOY decrease in churn, from 1.09% in 2012 to 1.02% in 2015.

While shared data is a huge focus for North American operators, it is slowly growing momentum across EMEA. For example, it has seen success in TeliaSonera in Sweden.  Launched in 2013, it has resulted in a 2% reduction in churn YOY 2014-2015. During this period TeliaSonera experienced a 1.8% uplift in subscribers, a clear indication that this shared data model is transferable across developed countries, and maintains a stable rate of growth.

Where I believe shared data shows the most potential is in emerging markets, like Latin America and Asia Pacific. These regions are not as saturated as developed markets and show an opportunity for substantial subscriber growth. For example, Globe Telecom in the Philippines has experienced an 18% uplift in acquisitions YOY 2014-2015, approximately 50% of which is believed to be directly correlated to their shared data proposition. Operators in emerging markets need to jump on the bandwagon and learn from the success AT&T, Verizon, and T-Mobile have had at gaining new subscribers and reducing churn. 

Download our shared data guide book – The Evolution of Shared Data Operator Examples and Future Direction