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Mar 28

Written by: J. Gerry Purdy
3/28/2012 

In the ‘old days’ (meaning a year or two ago), you could sign up with any operator for an ‘all you can eat’ data plan for a reasonable monthly fee, e.g. $60/month.  Now, ‘all you can eat’ plans have disappeared from operators other than Sprint which will likely implement metered plans at some point due to their growing data communications demands resulting from adding the iPhone to their product mix.

With the introduction of the iPad, AT&T now offers three data plans:

• 250MB for $14.99 per month ($59.95/GB per month)
• 3GB for $30 per month ($10/GB per month)
• 5GB for $50 per month ($10/GB per month)

Now, 50% of iPad buyers are buying units that include a cellular modem (vs. 20% two years ago). But, there are still a very limited number of plans for consumption of wireless data.

I believe that the operators should expand their wireless data plans to better fit today’s varied user lifestyles.  Here are some plans that I’d like to see the major operators offer to both consumers and enterprise accounts.

  1. Family plans. Most of the major operators are in the process of offering family plans that include wireless data consumption where the total voice and data plan is shared among family members.  Thus, the data communications consumption isn’t charged on a per-phone basis but, rather, on a per-family basis.  This enables family members to share data consumption.  For example, a mother may not use as much data consumption as one of the teen children but, instead, uses more voice minutes than the teenager.  This requires some complicated changes to the operator’s billing system, but I expect to see family plans implemented in the near future.
     
  2. Evening and weekend.  We had evening and weekend plans for wireless voice for years but not for data.  Right now, data is charged by the total volume of data per month not when it is transmitted, and that’s certainly going to change.  Soon (in the next two years), I expect to see operators offer discounts for utilizing the data network during evenings and weekends when demands on the network are low.

  3. Nighttime.  Clearly, the wireless networks have the minimum traffic during 11 pm to 6 am. There are shift workers and some demands by young people late at night, but generally speaking, the data networks have much less demand during late night and early morning.  This could be a good time for enterprises to schedule mobile system updates for devices that are in the field and not near Wi-Fi.  Consumers could use this to download rich media when out socially or not able to access Wi-Fi.  This could be a good opportunity for operators and users alike.

  4. Session-based.  I suspect that many people (including me) travel only occasionally, but when we travel it would be great to pay for wireless data network access during these times.  Operators are working on ‘session based pricing’ that will allow users to only have to pay for the times that actually need it.

  5. Bucket-based.  In this alternative, the user can buy wireless data by the amount and use it over a longer time.  The operator gets paid up front, so in that sense, it works like pre-paid, but it also can last a number of months.  For example, I might want to buy 50GB of wireless data and then use it at various times.  I might be able to get a better pricing by buying it by the ‘bucket’ than by the month or session.  This would operate more like when we buy gasoline for our car:  we don’t pay $x/month gas for our cars.  Rather, we buy what we need – a small amount when we’re driving locally and a larger amount when we take a trip.  This seems like a really good way for consumers and enterprises to acquire wireless data.  For example, we could see an offer of something like $50 for 5GB ($10/GB) or $250 if you purchased 50GB ($5/GB).  And, if I then scheduled to download some rich media at night, the network might give me a two or three times multiple for initiating the transfer when the network isn’t busy.

  6. Least-cost routing.  In this scenario, I sign up for a plan that includes software to always send the data via the least cost (say via Wi-Fi) or evening or weekend rather than in prime time, unless I override the plan.

  7. Roll-over.  AT&T has had roll-over minutes since Cingular days, but this scenario provides roll-over for data as well as voice. ,Thus, I might only use 500MB of a 2GB plan and then have 1.5GB roll over to be used during the next month.  This is similar to the ‘bucket’ plan but doesn’t require the large, up-front purchase.

The key to implementing more flexible wireless data pricing is not a group of senior executives simply having a meeting and issuing a press release, but rather, the development and testing of the software that enables these plans to be put into place where the operator can verify the data communication plan on the phone and then account for it properly in the bill.

I hope that AT&T, Verizon Wireless, Sprint and T-Mobile (as well as special purpose brands and Metro PCS) offer many of these flexible pricing plans in the near future.  The operators will see a tremendous uplift in the use of cellular 4G in all mobile devices not just tablets.

Note:  I received some good input on this column from my sons, Bryan and Jason, who are now both working in the mobile industry.

Written By:

J. Gerry Purdy, Ph.D.
Principal Analyst
Mobile & Wireless
MobileTrax LLC
[email protected]
404 855-9494

Dr. Purdy writes a weekly column via eWeek, a leading online & digital publisher with millions of readers. Some of these columns are distributed via Inside Mobile with approval from eWeek.

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