Wireless in the USA: Worst of Both Worlds
The thought crossed my mind as I was yapping away on the message boards this Tuesday afternoon: Consider that capped, tiered or metered data plans -- the norm in Europe -- are now becoming the standard here too. Yet, unlike Europe, those capped plans still lock the consumer into a two-year contract.
So, basically, you lose the cheap unlimited plan in favor of a more European-style capped plan but without the -- admittedly more expensive -- freedom of choice to switch plans and jump to new devices.
I'm originally a native of the U.K., but it's been a long time since I had to go shopping for a phone there. I'd be interested in opinions on this topic from either side of the pond.
Could we eventually see U.S. carriers moving to a more European-style model were you pay more upfront for a device? Seems like Google (Nasdaq: GOOG) tried to push it without much luck. Maybe the major U.S. carriers standardizing on Long Term Evolution (LTE) could give the concept new life?
— Dan Jones, Site Editor, Light Reading Mobile
I don't think consumers in the US can stomach a lack of subsidization in their devices at this point. As smartphones come closer and closer in functionality to full-blown computers and use the latest processors, screen technologies, etc, the 200 dollar price point will dictate what is able to sell in large quantities.
I would be less upset about the move of US carriers to a "cap plus pay extra" model if it were primarily designed to curb the harmful effects of unlimited usage on the network (kids bittorrenting on their teathered smartphones because they get better speeds on their cell phone than their rural telco can provide via DSL) instead of a complete and obvious money grab. A 2 GB cap on smartphone usage in 2011 is abismally low based on what is becoming almost commonplace usage today. If the carriers made the default cap say 5 GB (as it had been on 2G/3G data cards for years), and charged something less insulting than $10 per GB extra, I think they could still get users to be conscious of their usage habits, make additional revenue, without completely screwing the consumer.