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'All You Can Eat' Is Off the Menu

12:25 PM -- In announcing its new mobile data price plans, AT&T Inc. (NYSE: T) is adopting just one of a number of marketing alternatives to the "all you can eat" model that has dominated developed 3G markets, but which is now putting strain on the carriers' networks and business strategies. (See AT&T Intros Mobile Data Caps and Bye, Bye Unlimited iPad Data Plan.)

According to a recent Pyramid Research report, which notes that "unlimited data plans are not sustainable in the long term," carriers need to introduce new pricing models. These include tiered offerings based on data usage (the AT&T option), time spent connected (the Telecom Italia (TIM) option), and limits based on the time of day, to shift traffic from peak daytime to off-peak nighttime and weekends (the SFR option).

But that's just the first step. Operators then need to take further action, for example, ensuring ongoing communication with their customers to make sure they know what their limits and costs are, and to segment the market with an array of plans that are tailored to different types of users.

Check out Pyramid's report, Mobile Data Pricing Plans: How Operators Can Escape the All You Can Eat Trap, for more details.

— Ray Le Maistre, International Managing Editor, Light Reading

shygye75 12/5/2012 | 4:34:06 PM
re: 'All You Can Eat' Is Off the Menu

The business model for mobile services may be in for a rethink. Prepaid services, which once were considered low-end, are emerging as a cleaner option to usage-based pricing. As the Pyramid report details, the vast majority of services in emerging markets are prepaid. By contrast, less than 25% of mobile users in North America are on prepaid plans. 

Sunderjeet 12/5/2012 | 4:33:59 PM
re: 'All You Can Eat' Is Off the Menu

Unlimited data plans certainly attracted users but they were never sustainable in the longer run especially with wireless networks. Rubbing such plans off the menu is something inevitable. I see future for service based data plans that favour one particular category of service. For instance, a data plan that suits VoIP calling over 3G phones, while other favours video streaming. Operators certainly need differential charging to cope up with the ever increasing capacity issues and RoI on their 3G/HSPA networks. Companies offering DPI solutions seems to have a bright future.

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