Is mobile broadband pricing finally starting to decline?

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. 

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