Lifeline providers

Increasing Margins of US Lifeline Providers

How can US lifeline providers reduce their per-minute cost

Lifeline providers

Thanks to the FCC-mandated, government-sponsored program, called Lifeline, the financially disadvantaged in the US can receive a cell phone and anywhere from 500 minutes to an unlimited number of minutes and texts every month — at no charge! The Lifeline program ensures that all Americans have the opportunities and security that phone service brings, including being able to connect to jobs, family and emergency services.

As of December 2016, lifeline providers are required to provide a minimum of 500 minutes per month and 500 MB per month at 3G speeds. As of December 2017, lifeline providers will have to provide a minimum of 750 minutes and 1GB per month and as of December 2018, a minimum of 1000 minutes and 2 GB per month. The Lifeline program provides a discount (support) on monthly service of $9.25 per month for eligible low-income subscribers.

Increasing minimum service standards

The FCC and Universal Service Administrative Company (USAC) are increasing the requirements of minimum voice minutes and MB data while reducing the discount on monthly services, meaning that lifeline providers will have to provide more voice minutes and mobile data while receiving less support funds (in US$) from the FCC program.

As of today, a Lifeline provider (MVNO) pays a high wholesale per-minute price (around 1.5 cents) and per 1 MB data price (around 1 cent) to Mobile Network Operators (MNOs). As a result of the increasing minimum requirements and high wholesale prices, the lifeline wireless providers are expecting a decrease in margins and ARPU. In addition, the increasing number of lifeline operators offering smartphones instead of feature phones increases the competition even more since offering smartphones makes their service more attractive to eligible consumers.

Reducing per-minute cost

To increase their margins, lifeline providers can offer voice over WiFi and data cellular services as an alternative to MNO’s high cost GSM service. This way Lifeline providers need only buy wholesale data from MNOs without GSM minutes. The new service decreases the per-minute cost by more than 50%. This technology enables MVNOs to offer 4 voice minutes for every 1 MB. Assuming an MNO wholesale 1 MB price is 1 cent, then a 1-minute call will cost just 0.25 cents. Thus, the Lifeline MVNO reduces its per-minute costs from 1.5 cents to 0.25 cents (excluding termination cost).

For a lifeline provider serving 50,000 eligible consumers consuming 500 minutes per month each, having 50% of their calls over WiFi and paying 0.15 cents per-minute termination, the total monthly savings amount to around US$ 300,000.

Lifeline providers may offer the service through low-end, used or refurbished Android-based smartphones to their subscribers or provide it through an OTT app supporting BYOD for iOS and Android-based smartphone devices.

Wifi first does increase margins

AudioCodes MobilityPLUS, a WiFi First wireless solution, reduces the lifeline MVNO per-minute and message costs by over 50%. It enables voice and messaging services over WiFi and cellular data networks, providing seamless interconnections from WiFi to cellular networks and vice versa, a process that significantly extends coverage areas and potentially lowers costs for providers and end-users alike. MobilityPLUS is delivered from the cloud as a service (SaaS) ensuring minimal initial setup and monthly costs, and fast deployment. AudioCodes’ field-proven underlying voice technology assures crystal clear HD voice quality that boost the subscribers’ satisfaction.

Full line of service for mvnos

AudioCodes and its US partners have come up with a complete, cost-effective and innovative service that truly does provide MVNOs and other providers a real competitive advantage in the wireless marketplace

  • White-label voice and messaging over WiFi and data service
  • Customized and pre-loaded into Android OS as an integrated dialer
  • Full support for BYOD, supporting iOS and Android-based smartphones
  • Wholesale voice minutes and messages
  • Wholesale cellular data
  • Integration with billing and CRM
  • SMS-enabled DIDs
  • Long distance termination

To learn more about AudioCodes MobilityPLUS, please contact mobilityplus@audiocodes.com

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