Customer perceptions toward dynamic pricing for wireless data service Online publication date: Thu, 12-Mar-2015
by Pilsung Choe; Jing Wu
International Journal of Mobile Communications (IJMC), Vol. 13, No. 2, 2015
Abstract: Dynamic pricing policy allows the network operator to charge a cost per byte based on the network usage and the traffic load, which can potentially attract greater user consumption and increase operator's revenue. In this paper, we conduct an empirical study on user attitude towards dynamic pricing for wireless data services to examine whether average revenue per user (ARPU) can be effectively enhanced. Using structural equation modelling (SEM) based on 211 datasets collected in the California Bay Area, we reach the following conclusions: 1) consumers agree that current flat-rate wireless data pricing is too high and rigid and can be more flexible; 2) dynamic pricing can increase user satisfaction of the service; 3) dynamic pricing can increase the revenue for operators. Overall, we conclude that dynamic pricing can on one hand provide a better quality of service (QoS) to users and on the other hand achieve greater revenue for the wireless operator.
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