Family Data Plans are Coming

Verizon Wireless expects to offer family data plans “sometime in 2012,” says  Verizon Communications CEO Lowell McAdam. 

The long-awaited move should have roughly the same impact on mobile broadband adoption as family plans for voice and texting have had on mobile adoption, namely drive mobile broadband usage and accounts very high, over a relatively short period. Family data plans coming

Family plans for voice and data were a major factor in driving widespread adoption of mobile devices in entire households, and family data plans are fully expected to spur adoption of smart phones and data plan usage.

In 2003, family plans accounted for less than 10 percent of the U.S. market, where by 2007 they accounted for 41 percent of adult mobile subscriptions, and 56 percent of new activations. Family plans revolutionize the market

In 2005, researchers at the Yankee Group noted that “family plans have been the main driver of teen cell phone adoption during the past few years. Family plans drive teen mobile adoption

As recently as 2007, 71 percent of all family plans involved only two lines, while Ericsson Business Consulting suggested at the time that nearly 60 percent of family plan accounts, the master account holder is using 75 percent or more of the monthly bucket minutes. Impact of family plans

Contrast that with the situation late in 2011, when the heaviest usage is probably not on a parent’s line, but on the teen and young adult devices. That would be true both for voice as well as text messaging. In many families, it was children who got parents using text messaging, which were, pre-2007, “data services,” as mobile broadband had not begun to be adopted on a wide scale.

Most observers also would say that family plans drove text messaging adoption and contributed to lower churn, as well.

A study by Strategy Analytics suggests that 60 percent of smart phone owners want a single, shared data plan to connect multiple devices like tablets, smartphones and laptops. About
50 percent of smart phone owners are interested in connecting multiple devices through tethering to their smart phone and 40 percent have an interest in a standalone 3G portable WiFi router (like the MiFi from Novatel Wireless) to connect all their devices. Consumers want family data plans

Executives at AT&T and Sprint also have been talking about the changes for years, and it appears the plans finally will be offered. Though it appears specific policies are not yet fully worked out, the plans will encourage purchases of smart phones and data usage across a range of devices on a single account. Policies not set yet

"I think in 2012 we will see it," McAdam said. UBS webcast

At the moment, not that many service providers offer family data plans, and most plans are not the robust plans we typically see in the U.S. market for texting and voice.

Since the spring of 2011, Orange has been offering two devices per data plan, bundling 600 minutes, unlimited texts, unlimited BTZone WiFi access, and 2 GBytes of  shared data across for iPad and iPhone users, for example, with a cost of £99 a month for 16 GByte plans, according to Infonetics Research.

Typical U.S. family plans might allow as many as five devices to share texting and voice buckets. The number of devices presumably would be greater, to include tablets and tethering, for example, once the major U.S. carriers start to introduce the new plans. .

Vodafone Ireland offers shared mobile broadband for business users with a 5GB limit, shared across however many users is required, for a fee of €7.50 per connection per month, with each additional increment of 5GB being another €10.

Optus offers a plan connecting five users each on a 4 GByte shared plan, with 20 GBytes of data pooled between those five users each month.

Infonetics forecasts that approximately 15 percent of all smart phones (with some regional variation) will be sold as part of a shared data plan by 2015. Likewise, 15 percent of tablets will be sold as part of such a plan by 2015, and that percentage will continue to grow beyond this point, according to Shira Levine, Infonetics Research directing analyst, and Richard Webb, Infonetics directing analyst. Family data plans set to grow

Infonetics forecasts for penetration of family data plans likely will be revised upwards once the U.S. service providers start to introduce the new plans. As family voice plans made feasible use of mobiles by children and teen-agers, so family data plans will expand mobile data usage from a couple of devices, or a few devices in a household to allowing every device to be a smart phone, plus encouraging users to buy network-capable tablets and e-readers.

To the extent that mobile service providers wish to encourage network use by tablet devices, the family plans will be the key enabler of more-rapid adoption.

Family Plans Now Dominate Mobile Industry

Family plans now dominate consumer mobile service packages. More than two thirds of consumer contract plans are family plans, up from less than 50 percent at the end of 2005, according to Nielsen Co.

According to a new T-Mobile survey, 73 percent of households with both family plans and children 22 or older still have an adult child on their plans.

At T-Mobile, for instance, an individual plan with 500 minutes and unlimited texting costs $49.99 a month with a two-year contract. A family plan with 1,500 minutes and unlimited texting costs $99.99 a month for two lines, or about the same per person for more minutes. Adding two additional lines costs $10 a month, and cuts the price per person to $27.50.

Access for "One Price Across Digital Platforms" Will Come

In a move with likely implications for the evolving Internet access business, The New Yorker will let readers pay once for digital access across the iPad, the Kindle and other platforms, hoping to improve on the current industry practice of charging even subscribers for each edition on each device.

The same sort of thing ultimately will happen in broadband access as well, as users start to experience greater pain paying separately, by the device, by the form of access, by the place for their broadband access services.

Both AT&T and Verizon already have spoken about a future scenario where an authorized user can use wireless and wired broadband access, across multiple devices. Think of it as a sort of family plan for individual users, where the "family" includes all the communications-capable devices a particular user wants to use.

If you think the future will feature communications need for a wide variety of appliances, used across home and mobile enviornments, but with differing usage characteristics, a unified plan makes sense.

New Yorker Plans One Price Across Digital Platforms - Advertising Age - MediaWorks

24% of Landline Users Would Consider Abandoning Landline Service

As many as 24 percent of landline users would consider abandoning those lines in favor of mobile-only service, a survey by In-Stat sugggests. And some think that forecast is too conservative. Citigroup analyst Michael Rollins argues that by 2010, wireless-only households should rise to 27 percent, up from 13 percent last year and an estimated 17 percent this year.

In fact, the cord-cutting trend seen among younger U.S. wireless users might be hidden to a certain extent, as many teenagers may now be quite comfortable with the idea of using a mobile as the voice appliance, and simply haven't yet had a chance to make their preferences known in the broader market.

To be sure, the typical cord cutter is under 35 years old with a small household and a lower income than the traditional phone user, In-Stat says.

“The largest number of current cord cutters—those who do not have a landline, but rely solely on their mobile phone—are those one might expect: young, single, living alone, or sharing quarters such as a dormitory or rooming house,” says Jill Meyers, In-Stat analyst. “In many cases, these are people who are the least-likely candidates to have a landline phone.”

To nobody's surprise, current cord cutters, who have no landline service, use 22 percent more mobile minutes than the average user, and 40 percent more mobile minutes than those not interested in surrendering their landline.

As you also might suspect, potential cord cutters frequently are on family or group mobile rate plans. That is to say, they are teenagers or college-age adults whose bills are paid by other family members. They also are users who simply are accustomed to communicating using a mobile device rather than a "home phone."

Potential cord cutters also are heavy users, since nearly all their calling and texting is concentrated on a personal mobile device. Their spending averages $111.41 a month. Most estimates peg cord cutters at about five to eight percent of users. Analysts at the Yankee Group think the trend will keep growing, and reach 15 percent in several years.

As a parent with three young adults on a such a plan, I can attest that per-capita spending is much higher than for the parents also on shared plans. Way higher, and in line with the In-Stat findings.