Thanks to Ann Higgins for sending me a recent article on broadband hogs in the mobile market, Analyst: Carriers set to introduce usage-based mobile data pricing. In short, the article predicts that, “This year may well be the year that wireless operators adopt usage-based pricing models for their heavy-volume mobile data users, according to analyst firm Deloitte.”
It reminded me immediately of the issues wired providers (and users) have been dealing with the impact of top users, an issues I’ve brought up in earlier posts. Back then I compared the issue to buffets at restaurants. Is the big guy (or gal) who comes every week but eats like an extended family your best or worst customer? What do you do when he starts to bring friends to the feast? It seems like the same is happening in the mobile world:
“If you look at what’s happening today, they’re [providers] being forced by necessity to adopt usage-based models,” Asmundson said. “All-you-can-eat business models depend on your ability to predict how much data your customers will consume. The iPhone has proven that you can’t make those kind of predictions.”
AT&T Mobility CEO Ralph de la Vega offers consumer education as one solution – well that partnered with some sort of metered pricing. He does have a point when he says that most users aren’t aware of how much broadband they are consuming – maybe there’s an app for that!
Something’s going to have to give. I haven’t been actively following the Consumer Electronics Show in Las Vegas – but just catching what the mainstream media is picking up I’m seeing a lot of cool handhelds hitting the market and they’re all going to nibbling on the available broadband.
I just hope that if providers increase their fees that they will also increase coverage. In fact maybe increasing expected use/revenue per user will help persuade providers to go into new areas.
The availability of content will always overmatch the network. Just as soon as networks had capacity for hi-def TV; here comes 3D TV. The availability of free apps for mobile devices, most of which generate ad revenue for the app owner, grows every day.
Regarding coverage, it seems to me that providers will be forced to invest in their core networks where there are many customers to keep up with the demand rather than increase their coverage areas.
The great advantage of unmeasured flat-rate service of any kind is certainty. If I go to the buffet, it’s $7.99@ for everybody from my salad bar daughter to the whole hog teenager. I’m more likely to experiment with new services and features–in for a dime, in for a dollar.
The flip side as a consumer, broadband hogs may inflate the basic cost of service beyond my threshold. If I only want to check 511MN.org mobile on my phone, why should I get service that can play World of Warcraft?
I like the flat rate myself. I’m using a pay-as-you-go here in Ireland. I’m always running low at just the wrong time. Of course the flip side of it is that I can keep my phone without a contract here. So I’m not paying a monthly fee when I’m not here.
I guess it’s tough to please all of the people all of the time!