Empirical Evaluation of Fair Use Flat Rate Strategies for Mobile Internet |
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Authors: | Marcel Fritz Christian Schlereth Stefan Figge |
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Affiliation: | 1.Detecon Inc. (USA),San Francisco,USA;2.Assistant Professor for Marketing and Electronic Services Faculty of Economics and Business Administration,Goethe University Frankfurt,Frankfurt,Germany;3.T-Mobile Stiftungsprofessur für Mobile Business & Multilateral Security Faculty of Economics and Business Administration,Goethe University Frankfurt,Frankfurt,Germany |
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Abstract: | The fair use flat rate is a promising tariff concept for the mobile telecommunication industry. Similar to classical flat rates it allows unlimited usage at a fixed monthly fee. Contrary to classical flat rates it limits the access speed once a certain usage threshold is exceeded. Due to the current global roll-out of the LTE (Long Term Evolution) technology and the related economic changes for telecommunication providers, the application of fair use flat rates needs a reassessment. We therefore propose a simulation model to evaluate different pricing strategies and their contribution margin impact. The key input element of the model is provided by so-called discrete choice experiments that allow the estimation of customer preferences. |
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