Light Reading

Mobile Data: If the Cap Fits

Dan Jones
1/29/2013
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How users use and pay for data on their mobile devices remains one of the most contentious issues on the U.S. wireless scene in 2013. The big four carriers in the U.S. are neatly split between promoting capped shared data plans as the way of the future and preaching unlimited data as the right direction for smartphone users. The two biggest operators -- AT&T Inc. and Verizon Wireless -- introduced shared data plans in 2012 and are busy promoting them as the way ahead. These plans allow users or families to share a monthly bucket of data between phones and add other devices – like tablets -- for a nominal fee. Both AT&T and Verizon executives declare themselves happy with how this new idea has been adopted by the American mobile consumer. Verizon revealed earlier this January that 23 percent of its monthly subscriber base is now on its "Share Everything" plan. "By the end of the fourth quarter, more than 6.6 million of our subscribers were on Mobile Share," said AT&T CFO John Stephens on the operator's earnings call on Jan. 24. More than a quarter of AT&T's Mobile Share subscribers have more than 10GB in their shared buckets. Sprint Nextel Inc., meanwhile, has long been the poster child for unlimited data plans for smartphones, even featuring its CEO in commercials to extol their virtues. How to treat smartphone customers is what matters most right now. In Light Reading's recent survey on mobile data, 43 percent of respondents said that they expected 50 percent to 75 percent of their customers to be using smartphones by the end of 2013. On that basis alone, unlimited data plans might seem to make the most sense. They are not the only piece of the picture, however, as AT&T and Verizon have larger 4G LTE footprints than their smaller rivals and their top-performing 4G markets are faster. So if a user cares more about performance and coverage than price alone, then the big two could prove to be a better choice. There's another aspect to this as the U.S. gets completely saturated with smartphones. Operators are trying to supplement those sweet, sweet data revenues with traffic from other devices such as tablets, netbooks and even wireless carriers. Well, none of the big four operators offer an unlimited plan for tablets or 4G netbooks; these devices are too data-hungry and can even frighten operators with how much bandwidth they can consume. So, as people look to add devices beyond smartphones, shared data plans that allow you to add a tablet for $10 a month might well become more attractive rather than adding a separate plan for another device. I suspect that Sprint and T-Mobile USA will hold hard to their unlimited plans for as long as they can, since they see them as differentiating them from their larger rivals. In that case, they are going to need to get smart on how they add tablets and other devices to their customers' plates. There are probably ways to bundle tablets with sports and movie packages which, as usual, carriers are being slow to explore. Nonetheless, Pyramid Research is predicting that "2013 will mark the beginning of the end for unlimited data pricing." If that's the case, it's going to be a knock-down, drag-out fight of a year. For more

— Dan Jones, Site Editor, Light Reading Mobile

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