UMA Today Magazine: Home Zone Issue (Spring 2008) Page 27

It's clear that the battle for the home is well underway.

In an extremely competitive telecom environment, multi-
ple mobile, VoIP and occasionally fixed-line operators are
bearing their swords to conquer personal communication
services at home.

The ideal solution for a mobile operator in this battle is

to create a service `zone' in the home. In this zone, the op-
erator can offer aggressive discounts to incent consumers
to use their mobile phone as their only phone for all types
of personal communications services (voice, instant mes-
saging, email, browsing, social networking...)

Unfortunately, in this battle, the mobile provider is at

an operational disadvantage. The mobile radio access
network (RAN) is typically more expensive than fixed or
IP networks in the cost of service delivery. The structure
of the macro RAN does not support a good `home service
zone.' And with low mobile device performance indoors
(coverage, packet data rates), it becomes clear mobile pro-
viders need a new approach in the home.

To combat this, T-Mobile and Sprint are focusing on

the next generation of Home Zone service technologies
to overcome these issues. Known as "Home Zone 2.0"
(HZ2.0), these services rely on low power in home wire-
less access points (Wi-Fi or femtocells) to improve mobile
performance, while using the consumer's broadband and
the internet to lower service-delivery costs.

There are many variables for operators to consider

when developing a HZ2.0 service offer based on femtocells
or dual-mode handsets (DMH): pricing, positioning,
strategic objective and more. A handful of operators
have stepped ahead of the pack and are establishing best
practices for HZ2.0 offers.

keY oFFer inFLUencerS

Service Objectives

Before crafting a Home Zone 2.0

service offer, an operator should first determine its pri-
mary objectives for deploying the service. There can be any

number of business drivers and objectives with a HZ2.0
service. Typically, it is intended to achieve one or more of
the following objectives:

Increase mobile average revenue per use (ARPU)

Accelerate/manage fixed-mobile substitution (FMS)

Increase mobile subscriber acquisition

Increase broadband subscriber acquisition

Increase subscriber loyalty and reduce churn

Address threat from VoIP providers

A well-crafted service offer may be able to address mul-

tiple objectives and meet with greater success. However,
it is important to prioritize the service objectives to ensure
that internal and external company goals are met.

Market Position

When evolving a HZ2.0 service strategy,

an operator needs to clearly understand its market position
relative to other mobile and broadband providers. For
example, a HZ2.0 service offer from an integrated operator
with leading market share in both mobile and broadband
service would likely be quite different from a mobile-only
operator that is a challenger in the market.

Charting an operator's market position (Figure 1, p. 26)

can help identify opportunities or issues to be addressed
by a HZ2.0 service offer. Paired with identified service
objectives, the market position chart is helpful in plotting
HZ2.0 service goals.

As Figure 1 shows, a HZ2.0 service targeted at existing

mobile and broadband customers (top left square) is the
easiest opportunity to address. For integrated operators
with strong market positions in both services, it may make
sense to target the initial HZ2.0 service at this group to
increase loyalty and mobile usage.

However, if the market has little broadband penetra-

tion (top right square), or the operator has a low share of
broadband (top center square), the objective may be to
secure new broadband subscribers. In such a situation,

In the US, T-Mobile and Sprint kicked off new service plans in 2007
designed to make the consumer's mobile phone their only phone.
T-Mobile's Wi-Fi-based HotSpot @Home service and Sprint's femtocell-
based Airave are the next generation of plans geared towards helping
mobile operators to own personal communications in the home.

SPRING 2008

UMA ToDAY