Definition
Tiered Pricing is a billing model where different unit prices are set according to usage tiers: the higher the usage, the lower the unit price in the corresponding tier. It supports tiered billing based on dimensions such as number of connections, traffic, and duration. Combined with Volume Discount, it incentivizes large customers to increase usage, enhancing retention and ARPU. In the International IoT Cloud Platform (ICMP), Tiered Pricing is a common configuration method for Rate Card and is suitable for scenarios such as Pooled Data and Shared Bucket.
Working Principle
Tiered Pricing divides usage into multiple tiers, such as 0–1GB at $0.10/MB, 1–10GB at $0.08/MB, and 10GB+ at $0.05/MB. When billing, the usage summarized based on CDR or Usage Aggregation is calculated segment by segment according to the tiers and then totaled. It is similar to Volume Discount, but Tiered Pricing usually charges by "marginal price," while Volume Discount may charge by "overall discount." The platform configures the tiers and prices in Rate Card and supports differentiation by country, PLMN, and customer type.
Use Cases
Typical scenarios include: data pool billing—Pooled Data, Shared Bucket are tiered based on the total pool, with unit prices decreasing as usage increases; major customer incentives—Reseller, corporate customers enjoy better rates once usage reaches a certain scale; cross-border unified pricing—combined with Geo-Based Pricing, different countries can configure different tiers to suit local markets; TCO optimization—customers analyze usage distribution through Usage Analytics to optimize purchase tiers and reduce total cost.
Practice in ICMP
SimtoLink ICMP's Rate Card supports Tiered Pricing configuration, allowing multi-level unit prices to be set based on traffic, connections, duration, and other dimensions. It supports differentiated tiers based on customers, Reseller, and projects, so large clients can enjoy exclusive tiers. Combined with Usage Aggregation and Usage Analytics, clients can estimate costs under different usage scenarios, providing a basis for procurement and TCO optimization. The platform supports Unified Invoice billing according to tier details, meeting corporate finance and audit requirements.