Sofa Analytics No. 242. Cost of mobile gigabyte for operators

Hey.

At the end of the year, a discussion arose, which seemed to me interesting and worthy of discussion in the format of “Sofa Analytics”. The impetus was a “study” in which it was argued that communications in Russia are getting cheaper, and the conclusion was made based on the minimum tariff proposals of each of the operators. Exclusively for this reason, I put “research” in quotation marks, since this opus has nothing to do with the real assessment of the cases of the operators. On average, in the portfolio of each operator, basic tariffs take about 10%, about a third of SIM cards with such tariffs are spare SIMs, that is, those that are not used constantly. Laughing at the clumsy work in order to highlight the greatness of one of the operators in a narrow segment, he unwittingly revealed another problem. Many of the employees working within carriers who create rate offers do believe that such offers have different costs to the operator. Composing a tariff plan from bricks, mixing free minutes, SMS packages, gigabyte packages, they believe that the operator’s income directly depends on their efforts, and the cost of each package is very different. In some ways, even such a stereotype is actively supported within the operators themselves, since otherwise employees can relax beyond what is necessary and turn a blind eye to their duties.

Let’s take a look at the tariffs from Tele2 as an example, although absolutely any operator can be here with the same success.

Sofa Analytics No. 242. Cost of mobile gigabyte for operators

The mentioned tariffs differ in the volume of traffic – 6, 15 and 50 GB, respectively. The volume of included minutes also differs, but this is not so important, today, to a greater extent, tariffs are determined by the traffic package, as well as roaming and what they give for it. I will express a paradoxical thought: for an operator, each of these tariff plans is approximately the same in cost, and the differences between them in this aspect are scanty. In the logic of the layman, this is an unprecedented thing, because each tariff has different parameters, it is clear that one service has fewer services, and the other has more. But let’s think about this: what is the cost of services for an operator?

The largest part of expenses, both operating and capital, is the construction and maintenance of cellular networks and communication channels. Equipment is expensive and requires maintenance, which in turn requires human resources. The operator bears these costs regardless of how many subscribers he has, what tariff plans they choose. There is no way to avoid these expenses, to partially optimize, but nothing more.

The second most important expense item is the staff, those who work in stores, offices, support services and more. One or another optimization is also possible here, but it does not play a big role in the aspect of the issue that we are considering.

Is it possible to calculate the cost of GB of data transmitted over the mobile network? Certainly. The price will be different for different operators, in Russia I heard an assessment that differs at times, or even orders of magnitude. There is no slyness in this, since each operator takes into account many parameters when calculating the cost of GB – network costs, own state, and so on. But if we take the cost of GB in terms of electricity consumed, then it will turn out to be scanty in any dimension. It becomes important for the operator to fill the network with users, and the upper limit is the network capacity. It is possible that precisely because of this, the war of unlimited tariffs did not lead to a catastrophe, the capacity of networks in Russia was not dry.

Let’s look at tariffs from this point of view, when the operator perceives them to be equal in cost. It turns out that the tariff for 100, 300, 500 rubles per month (excluding third-party tariff options, for example, films) differs for the operator in how much he earns on it. If we take the cost of servicing the tariff, then it is the same for any plan and in Russia it is about 75 rubles per month. It turns out that the operator gets dirty 25, 225 and 425 rubles, respectively. The higher and more expensive the tariff plan, the better for the operator. This rule stops working for tariffs that cost more than 1 rubles, since roaming options and third-party offers are already added there.

The task of marketing is to create such a tariff line so that users choose tariffs in the middle price segment, from 500 rubles to about 900 rubles. In theory, it was possible to simplify the line as much as possible, to give only a few tariffs for everyone. But the great power of marketing is that other operators who thinly slice and segment their offerings would benefit. People really, when choosing a particular tariff, look at the number of included services, get involved in the game, in which they choose the best offer. Although they never consider the quality of the network, the ability to use services and similar “little things”, this understanding comes at a time when something corny does not work.

To some, the above may seem like an argument in favor of the fact that operators are fattening and earning too much. After all, formally, all tariff plans, plus or minus, are the same in cost, which means that you can sell the same thing much cheaper. Alas, this is not the case! Here the costs of operators for network construction, maintenance of work, plus salaries for those who work within these companies intervene. And this is not a penny, as it might seem to someone.

As an argument in favor of the fact that operators are fattening, I am often given the proposals that subscribers receive when switching from operator to operator via MNP, I will give a letter from our reader:

Eldar, good afternoon!

I want to tell my story about how I tried to leave the MTS operator for Megafon and … stayed with MTS.

I connected to MTS at the end of 2015, I needed a SIM card for the tablet. It was active for about 2 years, the monthly tariff fee was 500 rubles. Then for 2 years I almost forgot about it, since the need to constantly carry a tablet with the Internet with me disappeared. I set the tariff without a monthly fee, once every few months I sent myself an SMS, checked the balance in order to keep my SIM card. About a year ago, I began to actively use this SIM card again as a second one in my phone, I chose the cheapest package tariff for 420 rubles a month, and for about a year everything was fine, but after moving to another apartment I began to observe how the mobile Internet from MTS simply does not work in places where I spend 99% of my time (at home and at work). Before that, at work, I switched to the main SIM card, and everything was fine.

I decided to try to switch to Megafon, besides, my wife has a SIM card of this particular operator, and the test showed that everything is much better there with the Internet. I wrote a statement and waited. A couple of days later, a call came from MTS, saying that you are a very valuable client for us, we do not want to lose you, what happened in general, etc. I would not say that I spent a lot of money on an MTS SIM card, but apparently, for the operator, my costs were sufficient to try to keep me from leaving. I told them everything, promised to figure out the quality of communication at specific addresses. Now, by the way, I must say that the quality of the Internet from MTS has really become better both at work and at home. I specially checked it more than once – the speed has increased, the ping has become less, and the pages in the browser are loaded more fun, and the navigator in the car does not go offline.

As compensation for the inconvenience caused, I was transferred to a personal rate. For 350 rubles a month, I ended up getting completely unlimited Internet throughout Russia (with the exception of Crimea, of course), and I can even distribute 3 GB per month for free to other devices)) Every month they give me 500 SMS (which I don’t use , but let it be) and 500 minutes of outgoing calls throughout Russia from anywhere. Those. within this package of a little more than 8 hours of conversation, I can call even from Moscow to Khabarovsk to a city number, even from Perm to Vladivostok. In fact, there is no intercity, roaming, but for me this is important, since at work I have to constantly make a noticeable number of long distance calls from my personal SIM card.

In general, I want to say that I did not specifically chase “kopecks”, they say, this operator has a monthly subscription fee of 20 rubles less, and they give 5 GB more traffic, no. I just needed a normal high-quality connection. And it turned out like this.

If you find my letter interesting and worthy of attention, you can publish it in whole or in part on mobile-review.

Yours faithfully,
Mikhail Svitelsky.

Many in this story will see confirmation that operators are fattening. But let’s look at this story, keeping in mind that the cost of a larger service package for an operator is unchanged. The cost of attracting a subscriber, that is, advertising and marketing costs, today range from 4 to 6 thousand rubles. Losing a subscriber, the operator must take into account that the subsequent attraction will cost him this money, plus the fact that the network congestion will decrease. But if we talk about Russia, then not a single operator experiences problems with network capacity on a global scale, the safety margin is 25-30% on average. It will decrease in the 21st year to 20-25%, but this is still a significant value, and even peak loads will not dry out this reserve. All that remains is the loss of the subscriber, and in this formula it is beneficial for the operator that the subscriber remains, since physically he will not choose the volume of services that is offered to him. The stereotype suggests that for the operator it is more profitable for those subscribers who use services more actively. To a certain extent, this is true, but on hold, the approach is slightly different. A greater number of services and discounts are received by those who do not actively use the services of operators. Those who load the network to the maximum of their tariff plan and, at the same time, the tariff is high, are unprofitable, since they choose the capacity of the network. And here the analysis of additional parameters comes into play.

I hope that the stated paradox of the fact that for the operator the cost of tariffs is the same, you will understand after this material. Those who use the services more than others partially pay for the low cost of services for those with tariffs in the lower segment of the cost. The prime cost of different tariffs is the same in terms of operating costs, but do not forget to tie the costs of the network, its maintenance, employee salaries to them, and the picture will be completely different.

In terms of reducing the cost of communication in Russia, I can say that there is a fair amount of guile. If you look straight ahead, the cost of the transferred GB is getting cheaper year by year, but we only need these GBs more and more, the bundles of included traffic are constantly growing. And if earlier you had enough 5 GB of traffic per month, now it is already twice as much, and only a few years have passed. People are willing to pay more for more data, as it looks like a fair price increase due to their growing needs. And in this aspect, we constantly see how prices are growing, another thing is that we do not perceive this as an increase in the cost of communication.

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