Tuesday, July 24, 2012

How Important are Shared Data Plans?

Data revenue will grow to 65 percent of total U.S. wireless service revenue as voice declines to 35 percent in 2016, according to Hugues de la Vergne, principal research analyst at Gartner.

What might not yet be so clear is how the industry will get to that point, but different retail packaging likely will play a key role, even as more users adopt smart phones that almost automatically boost data revenue because devices have most value when an Internet connection is available, all the time. 

But nobody yet can be sure whether shared data plans offered by AT&T and Verizon Wireless will work as planned, namely lifting overall revenues while creating a usage-based data revenue model, while encouraging users to add tablets to their accounts for mobile broadband access. 

But some think the entire industry eventually will move in that direction, as was the case with some earlier packaging innovations, including the mobile industry's abolition of domestic long distance with AT&T's Digital One Rate, or the adoption of family plans for domestic voice and texting. 

As the number of devices with mobile network modems increases, consumers and small businesses in the U.S. will demand matching multi-device data rate plans, according to Gartner

The disagreement about adoption probably will not be decided, one way or the other, for some time. The reason is that the current structure of the shared data plans does not offer significantly better economics for users, compared to what they already can buy.

There are some marginal advantages and inducements to add tablet devices, for example, but the price advantage might not be so obvious to most users, or valuable. 

But Gartner believes multi-device rate plans will be a key driving factor in the expansion of U.S. data revenue from $81.4 billion in 2011 to $151.9 billion in 2016. 

One could get a rather robust argument at the moment about the importance of new shared data plans launched by Verizon Wireless and AT&T. Those two carriers clearly believe consumers want such plans, and also believe that the plans will boost revenue. 

Others are not so sure, or might even think the plans are unnecessary or less advantageous to consumers than more traditional plans. 

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