It is certainly arguable that wireless broadband technologies targeted at consumers, now entering their 4th generation, have been held back by a few key factors that are very recognizable. The factors can be collectively summed up as a slow uptake in adoption, a problem is something akin to a business version of the chicken or the egg, and the lack of compelling devices and applications. The device situation is partially intertwined with the first problem, and thus it should come as no surprise that it is this first problem that is being addressed by many mobile carriers. The problem with adoption can be summed up succinctly: Carriers have been slow to offer customers unlimited broadband packages because of the infrastructure investments necessary to make low-pricing feasible. Consumers may have been hesitant to opt for wireless broadband access in part due to the pricing structures for wireless broadband services.
What separates these two points of view is essentially a leap of faith that both parties can cross only to a point without seeing significant changes made by the other party, and wireless carriers are now starting to remove the obstacle that all services experience to one degree or another: the pricing barrier. To this end, Verizon Wireless and AT&T are both starting a mobile pricing war that is likely to affect the entire industry and may eventually impact other industries as well. A mobile pricing war could be all that it takes for wireless broadband to move to the foreground in the minds of many consumers, something that mobile carriers and consumers alike should appreciate.
Who Fired the Opening Salvo?
Nearly a year ago, Sprint announced their updated Simply Everything plus Mobile Broadband package for $149 per month. The plan incorporated unlimited calling features, unlimited texting, and unlimited broadband access, though Sprint’s definition of ‘unlimited’ may not necessarily be the most commonly accepted definition. Before covering that definition, it is important to realize that the concept of an affordable plan without limitations garnered a lot of industry attention because the plan proved to be a success. It is widely believed that customers are understandably deterred by complex rate structures, and nothing is simply than everything included at a fixed price. While Sprint took a major gamble by releasing this plan, it seems to have paid off.
Understanding Unlimited
The term ‘unlimited’ wireless broadband access does not actually mean that consumers can use their wireless broadband devices as much as they want. Instead, Sprint and a few other vendors seem to agree that the term unlimited data means that there is a 5 GB limit on the amount of data that can be transferred over the course of a month without incurring additional charges. On one hand, this might seem deceptive and perhaps misleading. On the other hand, a pair of arguments could be made to justify such a limitation.
The first argument worth considering is that 5 GB of data is actually quite a lot of data, over 160 MB per day on average. Unless one is file sharing or routinely downloading and/or uploading large files on their mobile device, chances are good that 5 GB a month is a limit that consumers are not likely to exceed. Those consumers who plan on using a wireless broadband adapter for their laptop or PC might have different needs, however, and could theoretically run into problems with such a limitation.
An argument that was made famous by the public spat between the FCC and Comcast is also worth revisiting when considering wireless broadband: consumers that use undue amounts of bandwidth cause other consumers to experience broadband services that are sub-par. As such, carriers have an obligation to the vast bulk of their customer base to put rules in place that limit the ability of a small number of users to ruin the experience of the majority of users. The expectation that carriers will spend endless amounts of money upgrading their infrastructure while keeping their rates reasonable is simply wishful thinking.
Whether these reasons constitute sufficient justification to use the term unlimited in such a way are certainly debatable. Chances are good that as more consumers start signing up for wireless broadband services, prices will decline and usage caps will actually increase as carriers will be able to justify expanding their infrastructure.
Now That the Price War Has Been Set In Motion…
While Sprint may have fired the first salvo in the pricing war, the Palm Pre and Pixi may have played major roles in winning Sprint new customers. This approach of reducing prices and launching new devices in a similar time-frame may become common, especially given the number of amazing mobile devices that are due to be released over the next year. Verizon Wireless offers new unlimited family plans that start at $119.99 for two lines, though this plan does not include unlimited data. What this plan does is brings people to the network, as approximately $60 per line for unlimited coast to coast calls is a veritable bargain. When consumers see Verizon’s new lineup of wireless broadband plans starting at only $9.99 per month (down from $19.99 per month), a data plan might become an impulse buy.
AT&T is also following suit by reducing some of their all-inclusive plans by up to $30 per month. The biggest changes to AT&T’s new plans are those that relate to their Apple iPhone-plans, and there is a rumor that Apple may release the iPhone on Verizon sometime this year due to Verizon’s accelerated 4G LTE deployment. T-Mobile and other providers are likely to follow suit, which should cause more customers to adopt 3G and 4G services. This in turn should make 3G and 4G services less expensive and ultimately better, as carriers will have ample justification to continue to spend more on their infrastructure.
What About the Devices
As the gap between consumer interests and the bottom line of carriers decreases, the world of wireless broadband should become a much more interesting place. This fact is not lost on companies that design and build portable devices that incorporate wireless broadband capabilities. The lack of intriguing and compelling portable devices that provide an excellent and reasonably swift experience has been another obstacle to mobile broadband adoption, but one that now seems to be coming to an end. Even consumers without cell phones and no interest in mobile broadband may benefit by the increased market penetration, especially if additional infrastructure investment allows wireless broadband carriers to start delivering new services to new markets. With IPTV (Internet Protocol Television) and VoIP (Voice over Internet Protocol) becoming more popular, it is conceivable that one day consumers will consider wireless broadband of some kind as their primary choice.
