If you thought ‘all you can eat’ data plans were here to stay, think again. Recent comments from two big US mobile operators hint heavily that the days of the ‘data glutton buffet’ may be limited. And the introduction of super high-speed LTE networks may be just the opportunity to re-train subscribers to become more frugal.
It was reported in the Washington Post that Verizon CTO, Dick Lynch said his company was looking to move away from the current flat rate ‘all you can eat’ (AYCE) data plans and instead begin charging users on the bandwidth they consume. Lynch used a very poor analogy by asking, “why should customers using an average amount of bandwidth be subsidizing bandwidth hogs?”
His comments came close on the heels of rival AT&T Mobility boss, Ralph de la Vega, who was looking at a pricing scheme that address usage, in order to deal with his network’s congestion issues. One sure-shot way of reducing any consumption is to charge more for it, but you also risk losing customers in the process, especially if they have become accustomed to something for nothing (or almost nothing).
Using the introduction of LTE is quite a good excuse. You can stay on the old 3G system on your current plan or you can move to LTE and pay a premium. That might work. Of course, a little billing creativity could go a long way. Take the example of mobile operators that offer capped plans. If you exceed the download limits included in the monthly subscription you pay for every MB after that, at a premium. There are also ‘AYCE’ data plans with a fair usage clause which have conditions clearly described in the contract. If that fair usage is abused then speed limits are applied automatically. This is better known as ‘throttling’. Some operators go as far as offering ‘AYCE’ data plans priced at pre-throttled speeds – pay more get more speed!
Smartphones may be getting the press for the increase in mobile broadband take up but judging from the number of ‘dongles’ (3G modems) attached to notebooks these days it is fair to say that the attraction of mobility over higher speed fixed-line broadband speed and the perception of greater security over WiFi and WiMax is pulling the high-end users in.
It looks like the feeding frenzy may soon be over and we may see enforced ‘data dieting’ when LTE is launched. This will, no doubt, bring some new challenges for billing departments to come up with creative and profitable data schemes. I can see the ads now, “Buy 5GB, Get 5 Free”!