The month of May saw significant announcements on service pricing adjustments from Mobile ESPN and Amp’d Mobile (the new data-centric MVNOs in the US). While Mobile ESPN introduced a whole new set of postpaid pricing plans that incorporate more voice minutes and less content at lower prices, Amp’d Mobile has taken it one step further by rolling out prepaid plans starting at as low as US$20. Such adjustments point to a shift in these players’ overall strategy, a shift arguably driven by their weaker-than-anticipated performance so far.
Mobile ESPN’s and Amp’d Mobile’s adjustments prove that voice remains to be the killer app and customers adopt mobile services, first and foremost, for voice. We have previously argued that Mobile ESPN’s pricing plans were not competitive with the other offers in the market, particularly on the voice front. In the US, operator differentiation through network coverage is rapidly giving way to differentiation through the number of minutes included in service plans. With the US ARPU at about US$50, we anticipated that few customers would be willing to pay a premium for voice for the privilege of accessing ESPN content on their mobile phones. Mobile ESPN’s current offers are on-par with the market and, in our view, will dramatically lower the barrier to entry for the ESPN fans. And once they do subscribe to the service, the MVNO will have a better chance to educate them on its data applications. Amp’d Mobile’s prepaid plans will also go towards acquiring more of its target audience, primarily youth with no or bad credit, and giving access to its large portfolio of media services. Indeed, the recent pricing adjustments by the data-centric MVNOs go to prove that mobile subscribers need more education on the data front, but that cannot happen in the absence of voice.
Exhibit 6: Comparison of Mobile ESPN’s Old and New Pricing Plans
Pricing Plan
Activation Fee
Price (per month)
Number of Peak Time Minutes
Unlimited Nights and Weekends
Data Services
New Plans
Fan 400
Waived
US$39.99
400
Yes
Limited*
Fan 800
Waived
US$59.99
800
Yes
Limited*
Fan 1200
Waived
US$79.99
1,200
Yes
Limited*
Fan 2000
Waived
US$99.99
2,000
Yes
Limited*
Fan 4000
Waived
US$149.99
4,000
Yes
Limited*
Fan 6000
Waived
US$199.99
6,000
Yes
Limited*
Old Plans
Pro 100
US$35
US$34.99
100
No
Yes
Pro 450
Waived
US$64.99
450
Yes
Yes
Pro 900
Waived
US$84.99
900
Yes
Yes
Pro 1350
Waived
US$104.99
1,350
Yes
Yes
Pro 2000
Waived
US$124.99
2,000
Yes
Yes
Pro 3000
Waived
US$174.99
3,000
Yes
Yes
Pro 4000
Waived
US$224.99
4,000
Yes
Yes
*All of the new plans include Mobile ESPN’s sports package, which includes some of ESPN ’s content. For full access, ESPN subscribers have to purchase the total sports package, priced at US$24.99, and available free-of-charge for the first month.
