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Is mobile broadband pricing finally starting to decline?
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As the holiday buying season looms, it looks like some U.S. wireless carriers are starting to see the light when it comes to mobile broadband pricing. Earlier this week, AT&T dropped the price of its 200 MB data plan to $35 per month from $40 per month, but kept its 5 GB plan at $60 per month. Likewise, T-Mobile USA announced last week two new data rate plans--a 200 MB data plan for $30 per month and a 5 GB data plan for $50 per month.
While the 200 MB data plans offer consumers a less-expensive option, analysts at CCS Insight say that these smaller bandwidth plans are useless for all but the very casual user. Anyone who uploads pictures (even occasionally) will run the risk of costly overage charges. And most users who invest the time and research into buying a wireless dongle or embedded laptop or netbook are likely to want the higher bandwidth plans.
It looks like $50 per month for 5 GB of data is the new competitive price point that other Tier 1 operators will have to match if they want to stay competitive in this space. According to recent rate comparisons by Current Analysis, most U.S. carriers are offering 5 GB for $60 per month, a rate that most have been resistant to reducing. Earlier this year, the FierceWireless editorial team predicted that in 2009 we would finally start to see mobile broadband pricing decline. Until now that prediction has not come true--at least not from the Tier 1 operators. We have seen flat-rate carrier Cricket Communications challenge this model with its $40 per month unlimited data plan, but Cricket clearly doesn't have the nationwide reach that the Tier 1 carriers enjoy and so its lower priced offering hasn't effectively challenged the other operators--at least not yet.
But is $50 per month for 5 GB of data the right price point to drive more growth? CCS Insight analysts don't think so. In fact, they believe that carriers need to reduce the price another $10 to $40 per month for 5 GB of data if they really want to create significant growth in mobile broadband. Of course, the real question is whether carriers want (or can support) a substantial uptick in this area. Some (like AT&T) are already suffering from the burden of excessive data demand, and other carriers are fearful of the same backlash from consumers if they open the floodgates.
I think we are on the cusp of a big change in mobile broadband pricing. With some operators starting to inch downward to the $50 per month price for 5 GB of data, I think it's only a matter of time before one Tier 1 operator breaks rank and goes with a $40 per month, 5 GB data plan. Of course, the carrier that makes this type of bold move will have to ensure its network can handle potentially dramatic increases in traffic. It may not happen in 2009, but I'm hoping we see some dramatic price movement in the first half of 2010. --Sue
P.S. Earlier this week FierceWireless published its list of the Top Turkeys (bad ideas, bad products or just plain bad business decisions) of 2009. Now our sister publication, FierceMobileContent, has published its Top Mobile Apps Turkeys of 2009. Be sure to check out the mobile apps that editor Jason Ankeny thinks missed their mark.
Comments
Posted by AWTinSC | November 20, 2009 - 1:14pm
200MB? This is indeed "useless" - even for the casual user. Consider the monthly bandwidth used by operating system and application patches, anti-virus updates, graphics-intensive web-sites... what have you. I have a 5GB plan from VZW and I have to ration my surfing to stay under THAT. I've used 50MB in the past 5 hours just for surfing and emailing.
If any carrier wishes to woo more consumers their way, they should start offering *10*GB plans for $50 per month!
Posted by Umman | November 20, 2009 - 2:11pm
You would think operators would get rid of 200 MB completely and up the low-tier data plan to somewhere around a 1-2 GB plan. Is there any discussion from operators about overhauling the pricing of data plans completely to offer more choices for the consumer?
Posted by Anonymous | November 20, 2009 - 5:14pm
AT&T, Verizon and Sprint are all at $59.99 but their overage charge is $50 per GB versus $200 at T-Mobile. The devil is in the details.
Posted by Ian L | November 20, 2009 - 10:39pm
How much data does everyone here use while at WiFi hotspots? That's basically what carriers are offering 200MB plans for.
Also, T-Mobile has the smallest 3G network out of the "big four" and thus they had to do *something* to their data plans to get people to sign on. They offer public IP addresses, unlike CricKet. However as of yet their coverage doesn't match AT&T, Sprint or Verizon. As such, $50 probably isn't the coming price point for wireless broadband, at least not yet.
Posted by James 2 | November 21, 2009 - 9:21am
US Cellular started out at $60 per month when they started installing EVDO, but went to $50 per month a couple of months later. But this is only fitting as they don't have a lot of native coverage and there is no EVDO roaming on Verizon.
I'd really like to see higher caps, 5 GB is just not doing it. Or maybe an accurate, up to date usage counter that is available even if you have your card on a router. And maybe overage fees that aren't so draconian.
Posted by Anonymous | November 21, 2009 - 9:48am
Traffic bottlenecks are looming, waiting to cut off the unwary at specific RF sites and backhaul. Cutting data pricing before installing more capacity at critical choke-points is pointless. If anything, data pricing needs to tier upward.
Posted by Administrator | November 21, 2009 - 12:48pm
Nokia phone not only offers a communication media intended for family, associates plus equals, but moreover a stand for information as well as amusement for the customer.
http://nokiaphones.ws/
Posted by Nate | November 21, 2009 - 4:12pm
The 200mb makes absolutely no sense at all ... at least for the consumer. Thatt would equate to a little over 6mb a day. Daily software and anitvirus updates would consume this easily. Websites today are not what they use to be 5-10 years ago, flash content, sound and higher quality images seems to be the norm, so just by accessing a site you're likely to use up more data. If I had to consider mobile broadband the 5gb plan would be a good starting point, but at current prices of $50-$60 per month I will not be patronizing any of them.
Why don't they implement unlimited plans with a lower throughput / bandwidth. I'll pay $35 per month for an unlimited 768mbps connection.
Posted by Anonymous | November 22, 2009 - 3:00pm
I agree with Nate (assuming he meant 768kbps). If you're having trouble with network congestion, why not just lower the speed?
Posted by Anonymous | November 22, 2009 - 9:18pm
Check out Clear deals where available. I'm getting a 4G connection for the 6-month discount price of $22/mo. Then it goes back up to $45/mo. Of course that doesn't include the cost of a USB modem and an initial activation cost, which I think was $35.
Posted by Rockalyte | November 22, 2009 - 10:42pm
There was a time a few years back when there was unlimited data plans. 5 whole gig a month seems useless even for 60 bucks. Its sad that AT&T is expanding their 3G map with these restrictive plans and refusing to bring broadband to their rural customers who may have no option but a 3G plan if it was even available. I was an AT&T customer in my home and watched their customer service and options go back to the stone age. I presently cannot even get dialup in my own home because AT&T dropped support for it. They can burn in hell for all I care.
I want to see a future of proper broadband and not being squeezed into using only a measly 5 gig per month.
Posted by Anonymous | November 30, 2009 - 11:33pm
I wish one company would offer UNLIMITED and combat at&t and verizon in a national commercial showing how small 5GB really is!
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