‘Freemium’ models and sponsored data – giving the people what they want?

by Thomas Vasen Sep 04, 2014

Following on the heels of increasingly common, albeit still fairly new “freemium” service offerings, AT&T’s recently announced sponsored data service launch has been unusually controversial. Not that that’s likely to deter other telco providers from offering a competitive alternative. Whereas the debate about any business model innovation in telecoms is usually confined to its potential impact on revenues (why else launch if not to increase subscriber numbers or reduce churn?), with toll-free data a Pandora’s box of broader issues appears to have been opened.

The Federal Communications Commission is already set to weigh in, clearly suggesting the agency feels that a toll-free service may be game for regulatory intervention. Why? Because with sponsored data, questions of net neutrality come into play, a topic already being fiercely and publicly debated by the CEOs of Netflix and various telco pipe providers, among others. They’re the ones on opposite sides of the sponsored data coin.

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