Asymmetric pricing and change in delivery to increase multimedia messaging service revenue

The current take-up of the multimedia messaging service (MMS) is far below that predicted when it was initially conceived. There are potentially a number of reasons, but most research has identified the high price. Factors such as asymmetric utility between sender and receiver, and uncertainty in the delivery of the MMS have not been considered. Based on real data from an Indian telecom operator we develop a model to derive the subscription and usage elasticity and show that a trade-off between sending and receiving prices, and subsidised handsets can increase MMS subscription by 200% whilst simultaneously improving revenue by 50%.