IBM: Tiered mobile broadband pricing here to stay

Analysis from IBM Global Business Services indicates that tiered pricing models for mobile broadband will be the future of the mobile market.

IBM said in a paper analyzing the telecom market during the next five years that as next-generation, IP-based networks--namely LTE and WiMAX--increase their footprint globally, carriers will stop trying to prevent over-the-top players from using their network connections and instead partner with them. Verizon Wireless has already done so with Skype. And because operators will lose revenue attributed to minute-based cellular plans, they'll make up for the shortfall by eliminating unlimited data plan.

"If people value connectivity then they must pay for connectivity," said Ekow Nelson, the global leader for the communications sector at the IBM Institute for Business Value. "With all-you-can-eat models there's going to be no way for carriers to compete. This will be an adjustment because most users have been conditioned to enjoy unlimited access to over-the-top services for free."

IBM outlines four different scenarios for how the mobile industry might develop during the next five years: Declining consumer spending leads to revenue stagnation and hence more consolidation; Government moves to bring broadband into underserved areas leads to market fragmentation; Big operators consolidate and join forces to aggressively compete with over-the-top players; and finally, as open access comes into play, the barriers between over-the-top services and operators come tumbling down.

For more:
- see this Network World article

Related articles:
Tiered data pricing and a missed opportunity
AT&T chief: Industry moving toward usage-based pricing
Is usage-based pricing inevitable?

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