In the States, the big mobile carriers have determined that 5 gigabytes of usage a month is plenty for their mobile broadband subscribers. For the most part that is reasonable; there aren’t many stories anymore of people’s service being terminated because of excessive usage. It doesn’t mean the cap is right, though. In fact, with new mobile broadband technologies ahead — specifically LTE and WiMax — the demand for network usage could skyrocket. Over in Europe “average users are downloading more than 5GB per month and some as much as 11GB,” according to a Frost & Sullivan report.
The report also says that “six to 14 times more data is being used on mobile broadband networks today than a year ago.” That number is only going to increase as we get better coverage and faster networks. Eventually, carriers are going to have to back off of their current caps and work out a new pricing plan which will work in the new environment. Luke Thomas, programme manager at Frost & Sullivan, understands this.
“Rather than providing flat-fee unlimited contracts or traffic caps for 3G LTE and Mobile WiMax, operators need to be more innovative with their pricing strategies to differentiate themselves from the competition but, at the same time, ensure that it is not too complicated or non-transparent for the user to understand,” said Thomas.
Hopefully this does not mean usage tiers with high overage charges. Time Warner Cable faced consumer fire over the past few weeks because of such a plan. The issue with LTE and WiMax networks is that there will be more devices connected to the network than cell phones and laptops. Many consumer devices will have embedded chips which allow them to access those networks. That doesn’t mean, however, that a certain degree of flat-rate pricing won’t work. It works in so many other industries. For example, gyms charge per month no matter how many times you go. The light users subsidize the heavy users. Same goes for Internet usage.
Still, this is an optimistic forecast. It means that as we see next-generation technology that operators will have to adapt.
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