According to a survey published in today’s Globe and Mail, Canadian teleom executives are considering putting an end to unlimited data plans. These plans produce floods of traffic on mobile companies’ networks, but add little to their bottom-line.
The survey, which polled 391 mobile execs around the world, found that 55% thought that tiered pricing (certain charges for different levels of data usage) was the future of service plans in mature markets, while 47% said that unlimited plans were damaging their ability to increase revenue. 48% thought mobile companies would institute new plans within three years.
“Mobile providers are remodeling their pricing strategies to sweat their assets whilst tentatively looking at new product offerings,” said Natasha Good, co-head of the international law firm Freshfields Bruckhaus Deringer that produced the report. “Usage-based pricing is a logical solution. It will ease current capacity issues by capping demand, contain capital expenditure requirements and potentially increase revenue.”
While this may be true, developing markets are still a different story. Due to the unfamiliarity of users with mobile networks, their data usage capabilities, and the sales appeal of unlimited plans, all-you-can-use plans may remain strong in these market. 78% of the execs in the survey agreed.
The companies looking to change their data usage structures in mature markets also may face the challenge of taking away a right already given to their customers. People have grown accustomed to unlimited data usage, and the first month’s bill with tiered charges may cause individual uproars.
“Questions remain over whether consumers will be easily weaned off flat-rate data tariffs and how long mobile operators can stave off the need for investment in new technologies and infrastructure to maintain quality levels,” Ms. Good said.
On our part, the trend we see is way more data usage, not less. This would lend itself to unlimited plans for nearly every user, not the opposite. Though mobile operators face the start reality of profit-maximization, there has to be some point in which inconveniencing customers is bad business.
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