Vodafone Data Plan Prices Slashed

In what appears to be a major bid to ignite the mobile broadband market, Vodafone NL has reduced data plan bundle prices as much as 50 percent for domestic usage and up to 85 percent for international use in 42 countries. That sort of thing might ultimately have direct implications for U.S. high-speed mobile services as well. And the reason is that if it appears WiMAX or any other mobile broadband alternative is getting traction, incumbent mobile service providers have a potent weapon: pricing.

While no carrier would be thrilled about slashing its prices in the manner Vodafone has done, the fact remains that incumbent mobile providers have and texting revenues to prop up their revenue streams. Upstart mobile broadband providers will have less margin to drop their prices. Which leads one to wonder what will happen when Clearwire and Sprint fire up their new WiMAX network on a continental basis (assuming Sprint perseveres).

All discussion of technology advantages and attributes will become irrelevant if the pricing leadership changes in any significant way. Pricing also is key to creation of some potential new mobile Web business with different pricing and use cases than today's mobile devices provide.

In other words, will WiMAX develop as a cable replacement, 3G replacement or foundation for mobile devices other than phones? In the first or second cases, pricing policy is pretty simple: offer comparable service at lower prices. In the last case, the issue is whether a sustainable business can be built around non-voice devices: cameras, game platforms, music players, navigation, mobile Web. In that case, prices probably have to be quite aggressive.

So part of the equation and business model is whether a WiMAX network can be built cheaply enough, and operated efficiently enough, to offer such lower pricing. In any event, it appears at least some leading mobile providers aren't going to wait to find out.

And as this forecast from In-Stat suggests, most of the future WiMAX market is going to be mobile, not tethered.

Pre-paid Vodafone mobile users in the U.K. last summer also found themselves offered new lower pricing of £2 per Megabyte for mobile data rather than the original £7.30 per MB. While not a complete flat rate plan, it's a possible step in that right direction.