Mobile Broadband Pricing Suggests it Is Not a Commodity

Some might look at how mobile broadband gets priced, on a cents per megabyte basis, and conclude that the pricing is somehow irrational or confusing. Some might say the pricing actually illustrates the fact that mobile broadband is not a commodity subject to uniform pricing across all use cases and devices.

AT&T charges smartphone users 8 cents per megabyte for 200MB of data, but 3G USB modem and MiFi users pay 18 cents per megabyte for the same 200MB. Corporate smartpone users pay 2 cents per megabyte ($45 per 2GB), but USB and MiFi users fork over just 1 cent per megabyte ($60 for 5GB). And AT&T charges pay-as-you-go tablet users $15 per each additional 200MB of usage, but it charges pay-as-you-go smartphone users $10.24 per additional 1MB -- that's 128 times the price per megabyte.

T-Mobile charges smartphone users less per megabyte than it does tablet and USB/MiFi users. You pay 5 cents per megabyte for the basic smartphone data plan ($10 per 200MB) but 10 cents if you use one of the other devices ($25 for 250MB). It makes sense that the company's unlimited data plans' pricing favors smartphone users ($30 versus $40), as tablets and laptops are likely to eat up more data than smartphones. "But when you're paying for a set amount of data, the 2:1 cost difference doesn't make sense," InfoWorld says.

The same situation occurs at the other leading mobile carriers as well. Some would argue that is irrational, since the "access" is a commodity. Others would counter that the different pricing suggests the access is not a commodity, and that value, hence price, varies according to the usefulness of access when used in different settings and in different ways.

The price of a beer is different when you pick up a six-pack at the grocery store, when you buy one beer at a restaurant and a different price on an airplane. The beer might be identical; the use case is not.

The same thing is true of mobile broadband: its value and price does vary based on the use case, the types of devices and the applications the bandwidth supports. Even within each use category, prices will vary based on the amount of data the user expects to consume, and the preferences a provider might have for encouraging or discouraging some forms of usage.

Some of us would argue that the variegated pricing actually shows that mobile broadband is not a "commodity," anymore than various use modes for voice, video or messaging actually are.

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