Cẩm nang dữ liệu không dây P8 ppsx

ARDIS hasnumerous nationwide pricing plans, which cover a reasonable range of applications,but all are skewed to favor short message lengths.. Figure 8-2 ARDIS basic message unit charges

BUSINESS 101: PRICE AND QUANTITY

FIXATIONS

Copyright © 1999 John Wiley & Sons, Inc.

ISBNs: 0-471-31651-2 (Hardback); 0-471-22458-8 (Electronic)

8

FITTING APPLICATIONS TO

PUBLIC OFFERINGS

8.1 NETWORK PRICE POSITIONING

We are always interested in simple ways to classify complex choices An initial

“application fit” technique for terrestrial, two-way wireless data networks is shown inFigure 8-1 If traffic activity is brisk but message lengths are short, public packetswitched networks are a reasonable business choice If traffic activity is modest butmessage lengths are long, data over cellular channels are a better fit This categoryincludes “pure” (image) facsimile If the application requires both high activity andlong messages, a private network is appropriate Public packet switched and cellularsystems can be extremely price competitive with each other for application profilesfeaturing both medium activity and message lengths

8.2 REPRESENTATIVE PUBLIC PACKET SWITCHED NETWORKS

The steep line of Figure 8-1 is only representational What is the real shape of today’spublic packet switched curve? List prices for many carriers are easily revealed with aWeb search Unfortunately, useful comparative evaluation of list prices is deeplyflawed for at least five reasons:

1 Some carriers count only user traffic that is successfully delivered Others countall traffic in the air, including protocol overhead and retransmissions

2 Some carriers make no distinction between peak and nonpeak hours Forcarriers who do make this distinction, the peak hours are rarely in perfectalignment

Copyright © 1999 John Wiley & Sons, Inc.

ISBNs: 0-471-31651-2 (Hardback); 0-471-22458-8 (Electronic)

3 Some carriers are truly nationwide with pricing insensitive to distance Othershave pricing regions or other “long-distance” charges.

4 Some carriers have discounted bulk rate pricing,1 bundled offerings,2 andspecial tariffs.3

5 Some carriers offer special, “all-you-can-eat” pricing for specific applicationtypes they are trying to encourage These are rarely the same applications,making comparisons difficult

Even more frustrating, many carriers change at least some of their parameters fromplan to plan Three very different pricing alternatives will be examined to set the stagefor useful comparisons

8.2.1 ARDIS Examples

The ARDIS philosophy is to charge only for user information that is successfullytransmitted All necessary registration messages, retransmissions, and protocoloverhead associated with its airtime protocols are absorbed, not billed ARDIS hasnumerous nationwide pricing plans, which cover a reasonable range of applications,but all are skewed to favor short message lengths

8.2.1.1 Short-Message Service ARDIS exploits a characteristic of its airtimeprotocol to offer low-cost pricing for telemetry messages The charge for messagelengths up to 64 bits is $0.03, regardless of time of day.4 This low cost is especially

Figure 8-1 Network types by message characteristic.

useful in fixed-position security alarm or vending machine applications as well asmobile applications such as vehicle positioning, perhaps accompanied by key statusinformation on the vehicle itself.

The list price for short-message service has a monthly minimum airtime charge of

$20 This charge is levied for a truck cruising down the highway, free to transmit atany instant, generating no billable user traffic, but registering on one base station afteranother on its way across the country If the truck device has a time-of-day clock, or

if the device is actually a fixed-position vending machine or burglar alarm, a specialprice is negotiated In the truck example, the device must “sleep” without registering

on the network It can “awaken” once or twice a day to report its position and, say,whether it is attached to a trailer This type of contract permits the minimum monthlycharge to fall below $4, reflecting (mostly) the administrative costs of billing a user

8.2.1.2 Basic Message Unit Pricing ARDIS’ standard, low-volume pricingplan is shaped by the actual cost of transmitting a user packet through the air Even ifthere are only 10 user bytes present, there are tangible costs associated with gettingthem airborne The costs grow only gradually after that, until the packet achieves itsmaximum length and requests an acknowledgment The pricing length of the packet is set

at 240 bytes—an artifact of the MDC4800 protocol The Basic Message Unit5 plan is alsotime-of-day sensitive, seeing its peak costs between 7 AM and 6 PM local time

During the peak hour the list price “empty message” cost is $0.06 The cost perbyte, and they are counted one by one, is $0.0003 Obviously, the cost of a usermessage will vary according to how much user information it contains, from $0.06when empty to $0.13 when full For the individual user, without any volume pricing,the peak-hour monthly cost at a variety of average message lengths and traffic volume

is shown in Figure 8-2

Assume a light usage profile with an average message length of 180 bytes and acombined total of 210 messages sent and received each month This solitary peak-houruser would pay nearly $28 per month

Figure 8-2 ARDIS basic message unit charges: peak-hour list prices.

ARDIS markets to high-volume vertical markets These subscribers simply do notlive with list prices Minimum monthly charges drop, as do both message unit and byteprices During the peak hour the volume user with the same profile would typicallypay ∼$19 per month, as shown in Figure 8-3.

8.2.1.3 DataPak Pricing There are three distinct DataPak plans6:

1 AirMobile Mobile Office covering cc:Mail, Lotus Notes, and Mail on the Run!

2 RadioMail (this service was terminated in July 1998)

3 IKON’s MobileCHOICE for Windows CE

All three DataPak plans break free of the 240-byte packet and peak-hourconsiderations Instead they are tailored to four monthly character usage levels: 20,

150, 350, and 750 kbytes Between the price steps, which have a flatter slope than theBasic Message Unit plan, the incremental price per kilobyte is $0.54, very close to theprice of a perfectly packed, 240-byte basic message unit On the surface this kilobytepricing appears to be 5–10 times higher than some competitive airtime prices Inreality it is not nearly that bad, but clearly the user is being charged for applicationfunction, not just airtime A summary of the three DataPak plans is provided in Table8-1 A visual comparison is shown in Figure 8-4

8.2.1.4 Two-Way Messaging Services ARDIS’ price plan for its Inter@ctivePager is reminiscent of the Basic Message Unit offering Once again the number ofmessages is the key accounting unit, and each message may be up to 240 characters

in length However, there is no attempt to count bytes within a message If you send

or receive two characters, say, “OK,” the message charge is the same as 240characters A 241-character message counts as two messages The notion of peak/offhours is discarded The plan assumes nationwide coverage is required; no break isgiven for metropolitan or regional use Two activity levels are fixed, along with

Figure 8-3 ARDIS basic message unit charges: peak-hour discounted prices.

several options, including Internet access for other E-mail offerings and transmission

of text to a facsimile machine The Two-Way Messaging Service plan is summarized

in Table 8-2

8.2.1.5 “All-You-Can-Eat” Pricing Virtually every carrier has a particularlyenticing price plan for selected services it wishes to promote The most attractiveARDIS offerings are identical: $49.95 per month for unlimited usage for one full year.After that promotional entry, prices return to the normal list level During the secondquarter of 1998 the services covered included:

1 Two-Way Interactive Messaging

2 Mail on the Run!

3 RadioMail

4 Ikon MobileChoice

Within each plan there are often other enticements: lower device costs, free Internetaccess, or reduced-price operator-assisted paging; see Table 8-2

Table 8-1 ARDIS DataPak pricing

Kilobytes per month 20 150 350 750 DataPak Plans

AirMobile (cc:Mail, Lotus Notes) $19.95 $49.95 $99.95 $189.95 RadioMail $33.95 $63.95 $113.95 $203.95 MobileCHOICE (Windows CE) $29.95 $69.95 $127.95 $227.95 Additional kbyte $0.54 $0.54 $0.54 $0.54

Figure 8-4 ARDIS DataPak pricing.

8.2.2 BSWD Examples

BSWD has multiple price plans The Standard Plan is usage based, with both peak andoff-peak rates At its optimum point it delivers characters for about $0.24 per kbyte,roughly half that of the ARDIS Basic Message Unit or DataPak plans The StandardPlan is often the strawman tariff quoted to corporate customers and is accompanied

by steep discounts tied to subscriber quantities and contract length

In October 1993 BSWD (then RAM Mobile) announced a simplified

“packets-carried” plan7 for its E-mail users This plan was insensitive to time of dayand had the very first all-you-can-eat provision for those “power users” willing to pay

$135 per month This price point became economical when usage exceeded 700,000bytes per month The first CDPD pricing plan, that of BAM in April 1994, wasstructured to lie literally on top of this BSWD plan

BSWD prices have mutated since 1993, and most customers are given special bidsinstead The most common list price plans in the second quarter 1998 were those thatcompeted with ARDIS DataPak and Two-Way Messaging plans

8.2.2.1 Wireless Lotus Notes BSWD announced Motorola AirMobile supportfor Lotus Notes in January 1996.8 Every effort was made to simplify the pricing plan;there was no peak-hour distinction, and no need to be aware of an arbitrary packetlength Four usage levels were established, based solely on actual data sent Thesetiers, with BSWD descriptors, are shown in Table 8-3

The Lotus Notes service represents a price increase from the earlier “packetscarried” plan in that the $135 mark is reached at 500, not 700, kbytes Further theunlimited usage has been dropped and the optimum price per kilobyte raised.However, there is specific user function provided in this plan, which always brings aprice premium

8.2.2.2 WyndMail Pricing BSWD has several E-mail offerings Examplesinclude the now defunct RadioMail, as well as DTS Zap-It (purchased by GoAmerica

Table 8-2 ARDIS two-way messaging services

Plan 100 Plan 250 Number of messages (240 bytes) 100 250

Monthly fee $34.95 $49.95

Incremental charge/message $0.35 $0.35

Options

Operator-assisted messaging $10/month +

$0.40/message $10/month +$0.40/message Internet services $6.00 per month Included

Facsimile, per page $1.00 $1.00

on July 14, 1998) and WyndMail, available only on BSWD WyndMail is feature richand has many two-way paging, text facsimile capability and text–speech–textfunctions It is usage based and ignores peak hours WyndMail is very much in tunewith BSWD coverage limitations and offers an optional “high gain antenna to boostsignal strength.”9 A very simplified summary of the pricing plan is shown in Table8-4.

8.2.2.3 Two-Way Paging BSWD has created a rapid sequence of pricing plansfor its interactive paging service The earliest emphasis was regional in nature, withsharp price breaks if one did not employ the nationwide capability The May 1998promotional plan10 ignored the regionalized structure in favor of reduced message feesand higher message counts

Like ARDIS, BSWD uses a message-based plan, but the maximum size of themessage is doubled: 500 bytes Discounts are published depending upon user quantity,and pager rental options are also offered One restriction that existed throughout 1998was that BSWD’s Gateway would not permit entry to all E-mail services employingthe Internet Access to ARDIS 2way.net was specifically blocked by BSWD, forexample A simplified summary of the “customer-owned” promotional plan is shown

Table 8-4 WyndMail price summary

Plan 1 Plan 2 Plan 3 Plan 4 Kilobytes per month 50 400 800 1,200 Monthly fee $19.95 $59.95 $89.95 $119.95 Additional kbyte $0.49 $0.39 $0.35 $0.25 Facsimile, per page $0.25 $0.25 $0.25 $0.25

correction overhead, and even retransmissions In practice, this philosophy only holdstogether for volumes less than ∼1.5 Mbytes per month In these cases care must betaken in competitive evaluations; a CDPD byte is simply not the same as, say, anARDIS byte.

ARDIS DataPak prices become quite uninteresting after ∼750 kbytes per month.Most CDPD offerings are just coming into their own at that point As 1996 began,GTE Mobilnet became the price leader when it “slashed prices of CDPD service.”11

The key GTE focus was at 1000 kbytes per month, a price point where it is stillcompetitive But GTE has not refreshed its prices; lowering them did not “definitelystimulate interest in wireless data”12 as hoped

In 1997 BAM became the clear price leader13 and remained so until May 1998.Then AT&T Wireless announced new Wireless IP (CDPD) rates that generallyundercut BAM.14 The usage-based AT&T list prices are $0.05 per kbyte whenvolumes are greater than 200 kbytes per month After usage levels rise above ∼1120bytes per month, the user becomes a candidate for one of two unlimited usage plans.Figure 8-5 is a comparison of the three carrier’s offerings at volumes less than 1.5Mbytes per month AT&T’s local offering is emphasized so that it is easier to threadthrough the maze of dots

It is interesting to read the words accompanying these price offerings GTEMobile’s Bronze plan15 is “designed for low-volume applications such as remotemeter reading, vehicle location tracking, and automated dispatch.” This descriptionencompasses an unusually broad range of applications and makes comparisonsdifficult Meter reading usually demands a very low byte count, say 4–6, with verylow frequency of use, perhaps once per month The automated dispatch profile usuallyhas outbound message lengths of ∼120 bytes, with an inbound return averaging ∼60bytes Moreover, dispatch activity is usually brisk, with some kind of traffic occurringmany times a day (even several times an hour)

Both BAM and GTE Mobile’s list minimum monthly charge is ∼$15, which surelymust be lowered for, say, a volume meter reading application While AT&T Wireless

Table 8-5 BSWD interactive paging service pricing:

Customer-Owned Equipment Number of messages (500 bytes) 200 400

undercuts both, starting at $8 per month, no meter reading application is currentlyknown to exist on CDPD.

8.2.3.2 High-Volume Usage This is the area of most dramatic change AT&TWireless now undercuts BAM by nearly 40% The difference grows even greatershould the usage grow beyond 4 Mbytes per month, the best BAM price point GTEMobile clearly does not choose to compete in the very high volume game It begins togive up at 3 Mbytes per month; at 4 Mbytes per month its list prices are roughly doublethat of BAM and 2.5 times that of AT&T Wireless

A simplified summary of the prices in this high-volume area is shown in Figure 8-6

8.2.3.3 “All You Can Eat” Plans

8.2.3.3.1 Bell Atlantic Mobile BAM was exceptionally aggressive in establishing

a $55 flat monthly fee plan for unlimited access to the Internet, or company intranets,

Figure 8-5 Representative CDPD list prices: low-volume usage.

Figure 8-6 Representative CDPD list prices: high-volume usage.

while the subscriber is in BAM’s home territory.16 This attractive price can be drivenstill lower for relatively small (more than 30) user volumes BAM also helps offset theprice of the CDPD modems, offering a national price of $699 for a Sierra WirelessAirCard and subsidizing the Minstrel (more on devices in Chapter 16).

In truth, Internet-only restrictions tend to cap any damage that might be caused by

a wayward fanatic Some of you may still brew a cup of coffee while waiting for a14.4-kbps landline modem, operating over a dedicated dial link, to retrieve Webscreens But by January 1998, 85% of PC users were already operating at 28.8 kbps

or faster, 53% at 33.6 kbps or faster, in order to reduce the insufferable wait times.17

Thus, it is an enormous shock to access the Web via CDPD If no one else is on thebase station (alas, too often the case), an effective bit rate of ∼9600 bps feelsinsupportable If you have the misfortune to be sharing the channel with another userthe wait times seem intolerable

If you want to conduct a simple test, a pair of side-by-side users can access BAM’sWeb site simultaneously Make it easy on yourself; for example, retrieve the Cellscapeprice list Do not wait for images to appear on the screen Click on Wireless Data, thenAirbridge, then Cellscape, then Price Plans just as fast as you can read the words Thiswill put 39 objects in your temporary Internet file—and about 104 kbytes That is quiteenough to demonstrate the response time problem of sharing this resource at low bit rates.Cellscape was chosen as a segue to a variation of the all-you-can-eat plan:Cellscape Service, a voice telephone with CDPD capability but greatly constrainedhuman factors The viewing area is a tiny 4 × 16-character telephone screen Dataentry beyond simple yes/no indications is annoying and slow But the plan has a low

$20 entry point for the additional data functions, doubling if one has both E-mail andpersonal organizer functions in the phone As long as one stays in the BAM homeareas, there is no additional charge for data sent or received

8.2.3.3.2 AT&T Wireless A variant of AT&T’s May 1998 plan is calledUnlimited Service In a nutshell, if you know that you will always be in an AT&TCDPD area, you can send and receive all the data you want for $55 per month If youroam, you pay an extra $0.05 per kbyte when in the domain of a CDPD carrier withwhom AT&T has an interconnection agreement

You can escape the uncertainty of the extra $0.05 per kbyte by paying AT&T $65per month; AT&T will manage the roaming charges for you This “roaming cap”astounded individuals at other carriers who were tempted to sign up for the AT&TWireless plan; the revenue brought to their own company by high cross-carrierinterconnection fees exceeded $10 AT&T Wireless blunts that ploy by specifying that

“the address of the person using the service must be in areas where AT&T Wirelessoperates.”27

How can this uncapped pricing be explained? AT&T will not cap my long-distancephone bill, no matter how much I use it The answer probably lies in the fact thatAT&T Wireless has dedicated one voice channel per sector in each CDPD basestation In busy metropolitan areas such as New York the voice revenue is already lost

It is better to get some money back on this idle channel

But suppose the plan works, and users really do begin to show up Will AT&Tsacrifice another voice channel in New York City? That channel, on one cell sitesector, is capable of returning $1100–$1400 per working day, more than $24,000 permonth, from voice At $55 per CDPD user (AT&T’s take), every dedicated sector on

a base station must have ∼25 CDPD users to break even with voice If it cannot bedone, the CDPD unlimited service plan is unlikely to be extended

8.3 COMPARATIVE PRICING: NATIONWIDE CARRIERS

Given the wide differences in carrier pricing philosophies, one has to be fairlyselective about what constitutes a fair comparison It is unfair to match a nationwideprice against a regional offering or a peak-hour plan against an “anytime” alternative,for example These problems alone make it harder to incorporate CDPD inside-by-side comparisons The added difficulty of what constitutes a billable byte canruin the analysis An attempt to deal with the special CDPD problems will be treated

in the next section

8.3.1 Mobile Office

Both ARDIS and BSWD have multiple mobile office solutions One point ofreasonable overlap is the Lotus Notes support derived from Motorola’s AirMobilesoftware Both carriers provide it, both count only bytes transmitted, neither has apeak-time sensitivity, and both have four price “steps” (albeit, not at the same point)

so that a look at the cost of the airtime offerings becomes meaningful

Figure 8-7 is calculated from the prices shown in Tables 8-1 and 8-3 Clearly thetwo carriers offer closely comparable price solutions In the area equivalent toBSWD’s description of “typical” usage, there is essentially no difference at all Notethat the ARDIS promotional plan has not been employed If a high-usage subscriberexpects to spend more than $50 per month, the first-year unlimited-usage plan wouldnormally be employed, undercutting BSWD

8.3.2 Electronic Mail

RadioMail (RM) was available a very long time (this author was a subscriber from

1993 through 1998) It was never particularly successful, and has now gone away,perhaps to be replaced by a product called MobileAccess When it was still available

on both ARDIS and BSWD, it made for an instructive comparison

In June 1998 RM’s Business Plan on BSWD was priced at the ubiquitous $49.95per 100 kbytes Subsequent traffic was priced at $0.34 per kbyte There was a $149.95unlimited-usage Power Plan.18 The results are portrayed in Figure 8-8 When usagewas below ∼450 kbytes per month—quite a lot of traffic for “post-it notes”messaging—ARDIS and BSWD had price parity At high-usage figures—600 kbytes

can be thought of as 30 messages of 1000 characters each, every workingday—BSWD was the better airtime choice.

Two other uncalculated factors favor ARDIS at these high-usage levels:

1 The modems required for ARDIS are typically lower priced than thosenecessary for BSWD Motorola’s PM100D lists at $400 and is often seen incatalogs as low as $250 The Megahertz AllPoints modem required for BSWDcarries a promotional price of $499

2 ARDIS can invoke the $49.95, one-year, unlimited-usage plan to blunt startupcosts

If these factors are used to calculate the four-year cost at the current prime rate of8.5%, the net present value (NPV) cost of ARDIS for 750 kbytes per month is $6760;the equivalent figure for BSWD is $6534 The $226 difference is only ∼3%

Figure 8-7 ARDIS vs BSWD wireless Lotus Notes pricing.

Figure 8-8 ARDIS vs BSWD RadioMail pricing.