There was some debate in the comments lately about the merits of the receiving-party-pays system used in the US and some other countries, versus the more popular calling-party-pays that’s the norm in Europe. Perhaps CPP is “better”, but as I pointed out, RPP seems to be working okay here in the US, given the rock-bottom prices we enjoy in comparison to Europe, the huge buckets of minutes we receive, as well as all the free nights and weekends and long-distance calls that are pretty standard.
Not that this is wholly definitive or anything, but Om Malik points to some research from TeleGeography that shows US operators at the top of global average minutes of use rates. Some commenters to Om’s post note that some other US carriers, serve even more, with Sprint’s average at 900 per month, and local-area carrier MetroPCS more than 1700, while T-Mobile averaged 985 minutes in the fourth quarter of 2005. So apart from Hutchison Whampoa’s 3, the top European operator according to Telegeography is France’s SFR at 296 minutes, with three UK operators hovering around 145 minutes and three German operators checking in with 115, 88 and 80 minutes.
So the idea that CPP is inherently better isn’t necessarily true — it would appear that the cost of calls is more important.
“US operators at the top of global average minutes of use rates”
What about revenues?
I guess it ’s a matter of what you are used to, but there’s one huge benefit with CPP: I simply don’t get calls from telemarketers or other no-good “spammers” on my mobile, because they couldn’t afford it. Same with spam SMS (unless they charge me for it; see your own note about sms.ac).
Also if my parents, previous girl-friend, stalker etc calls I want them to pay for it. Why should I? I don’t even want to talk to them.
RPP is analogous to that the receiver of a letter would pay for the stamp. That might commercially be a very good idea, but it sucks for the ones receiving letters.
I agree wholeheartedly with Red. Surely a consumer should be able to make an informed decision before deciding to pay for something of supposed value - whether that’s when purchasing a car, book or in this case, receiving a call.
Unless you’ve got some kind of telekinetic User Caller ID (”it’s Bob X calling to sell you something from India”) & some inclining of what they want to talk about, how can the consumer decide whether the call’s value will match the cost of taking it? That harks back to Red’s telemarketer spam example.
Another point that’s missing here is the fact that the take-up of SMS in the US is very low compared to Europe. It might be worth noting that you can convey a message much more quickly, cheaply and efficiently by SMS. This may also be why MOU are lower in Europe.
Finally, MOU mean nothing if operators are giving the minutes away.
For example, see CAP plans (also known as value bundles) in Australia. All of the operators here are offering additional value for a set minimum spend. An example is Vodafone’s $79 CAP - where the user can spend up to $500 worth of SMS, MMS & calls, for only $79 a month. These plans have dramatic effect on increasing MOU, but are draining all the operators of ARPU. The margins on both voice and SMS are being degraded. This is having a huge impact on the bottom line & therefore, MOU is a nice number but like Red said, is’nt it revenue that counts?
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