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4G/3G/WiFi

The 4G Dichotomy

5:00 PM -- One thing struck me at 4G World last week, with the advent of much faster 3G and Long Term Evolution (LTE) devices that have capped data plans: It gets easier to blow through the 2GB or 5GB limit on your contract.

In fact, with video, MP3s and many phones constantly updating social media like Facebook and Twitter in the background, it's getting easier for users who live on the edge of their cap to tip over without noticing.

I do wonder how carriers are going to deal with the tension between pushing the latest and greatest video content for smartphones and users getting irritated with overage charges on their bills.

Part of it will involve better alerts about data charges from carriers and more user awareness of times when it might be better to switch to Wi-Fi to watch that YouTube clip.

Of course, unless you live in a major city, it's not always easy to find a Wi-Fi connection. In fact, if U.S. operators do end up pushing out LTE to more rural areas then some might be tempted to use it as a cable or DSL alternative anyway.

Clearly, we not going back to unlimited data plans in the U.S. Sprint Corp. (NYSE: S) is the last major nationwide hold-out with unlimited data for smartphones, but even Hesse and co. have started to cap data for other mobile devices.

So, is there an answer? I would think that making it cheaper to buy extra data before you go over the limit might be popular with subscribers but probably not carrier shareholders.

Lifestyle plans that charge an extra $10 a month for heavy gaming or Netflix Inc. (Nasdaq: NFLX) use might also work. I don't yet see a huge amount of pressure from users to get carriers to rethink data plans yet, though.

This is probably because the majority of users stay within their 2GB monthly cap, at least according to the carriers. Yet it is in the interest of operators to keep driving up data revenue per user (ARPU), and faster phones and tablets make that easier.

So there must be a crunch point for many in the next couple of years. When exactly that will be and what it means for data pricing in the U.S. are the big questions that have yet to be tackled fully.

— Dan Jones, Site Editor, Light Reading Mobile

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joset01 12/5/2012 | 4:50:03 PM
re: The 4G Dichotomy

In theory, at least, the flat architecture of LTE should make the cost-per-bit cheaper over time but the backhaul upgrades and possible spectrum costs skew that picture.


I have to wonder if those $50 MetroPCS LTE plans are going to start to look more atractive to people as new cheaper devices arrive.

Jeff Baumgartner 12/5/2012 | 4:50:03 PM
re: The 4G Dichotomy

Cable operators that deploy speedier Docsis 3.0 tiers in tandem with metered data and data tiers face the exact same issue because they stand to hit caps even faster when they are bursting at 60Mbit/s or more.  They're using a mix of meters and emails to help customers keep tabs on their monthly consumption, so that offers some help, but that hasn't prevented a backlash from people who are used to all-you-can eat cable modem plans. JB

FredStein 12/5/2012 | 4:50:02 PM
re: The 4G Dichotomy

I found one organization driving this. http://www.boxtop.tv/ they appear to be wireline oriented. And I agree, it is not quick and easy for the Service Providers to change. And they will challenged to get ROI for LTE - RAN is really costly.

joset01 12/5/2012 | 4:50:02 PM
re: The 4G Dichotomy

Depends on the level of control doesn't it? If it's automated so that the carrier simply charges more during heavy traffic periods? Could be a problem if the congestion is caused by everyone using their phones during a disaster.

sgan201 12/5/2012 | 4:50:02 PM
re: The 4G Dichotomy

Dan,


http://en.wikipedia.org/wiki/E...


In my opinion, something similar to above system makes more sense.  Most of the time, the network is not congested.  It costs close to nothing to serve someone.  It is during busy hour that you get congestion.  So, traffic during busy hour costs more than traffic in low usage time as per service provider.


Dreamer


 


 

joset01 12/5/2012 | 4:50:02 PM
re: The 4G Dichotomy

Why not a smart pipe? I don't see why not, but it took *forever* to get some basic alerts and user account management apps in place. So I think we need to talk more about this issue and make users more aware and then we might see more interest on the carrier end.

FredStein 12/5/2012 | 4:50:02 PM
re: The 4G Dichotomy

Really glad you brought this up. It needs to be discussed. Some thoughts and questions:


It's ironic. The carriers are concerned about being the 'dumb pipe'. Why not be a smart pipe? Why can't the carriers make is easy to buy incremental data? The SmartPhone / App world has shown that the $.99 purchasing works. Yes, that would kill of some of premium all-you-can-eat subscriptions. Yes, it requires changes to billing and ops. Lord knows what a hairball those systems are with all the legacy and requlatory requirements. Another approach, which almost everyone I've spoken to despises, is to let content providers offer sponsor subsidized incremental content. It's the Radio/TV/Magazine model - really it's Google's model too. In India, ad-sponsors mobile service is already in place. Both approaches require change in operations and in thinking for the carriers. The carriers have very intelligent 'pipes'. They have to find ways to make bandwith delivery and pricing flexible and smart - WITHOUT making it complex. Or not.

sgan201 12/5/2012 | 4:50:01 PM
re: The 4G Dichotomy

Dan,


It is usually due to something else other than network congestion.   


Dreamer


 


 

joset01 12/5/2012 | 4:50:01 PM
re: The 4G Dichotomy

"Phone call do not generate enough traffic to cause congestion."


However you want to say it then, calls, texts, tweets, emails, too many people on one cell site etc, I have definitely experienced network problems on cellphone networks because of this.


sgan201 12/5/2012 | 4:50:01 PM
re: The 4G Dichotomy

Dan,


1)  Phone call do not generate enough traffic to cause congestion.


2) It could be as simple as ONLY count tonnage during congestion and/or busy hour.  This is similar to Free Weekend Minutes for cell phone.


Dreamer

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