Regional operators uncertain about longevity of unlimited data

LAS VEGAS--The CEOs of some of the smaller U.S. wireless operators told attendees at the Competitive Carriers Association gathering here that unlimited data may not be sustainable for the long-term. But they added that the ingenuity and engineering prowess of the wireless industry should not be underestimated.

During a keynote roundtable discussion featuring the CEOs of C Spire, Cellcom, Atlantic Tele-Network, Clearwire (NASDAQ:CLWR) and Immix Wireless, the executives spoke about the struggles they have competing in what they consider a "monopolistic" environment where the two largest Tier 1 operators, AT&T Mobility (NYSE:T) and Verizon Wireless (NYSE:VZ), dominate the market.

When asked about unlimited data pricing and whether it is sustainable, Cellcom President and CEO Pat Riordan said that his company does not offer unlimited data and he does not think it's sustainable. "There comes a point where there is so much demand and if you are going to make it one price it is not sustainable," Riordan said.

Hu Meena, president and CEO of C Spire Wireless, noted that his company does offer unlimited data but admitted that it will be challenging to maintain that pricing. However, he implored the attendees at the event to not "underestimate the ingenuity and engineering prowess" of the wireless industry, hinting that there may be ways to offer unlimited data for a longer time using techniques such as Wi-Fi offloading, small cells and more.

Clearwire President and CEO Erik Prusch said that his company currently offers unlimited data and he thinks it is sustainable for his company because it has an abundance of spectrum. He also noted that customers find unlimited data appealing because they don't have to monitor their data usage.

While unlimited data is appealing to consumers and a differentiator for small operators, Michael Prior, president and CEO of Atlantic Tele-Network, said that he believes that the business model for unlimited data is flawed because the majority of users are not heavy data users and therefore they are paying for unlimited data and not using it. "The average customer is losing out," he said. "They are paying for unlimited and not using it."

Last month NPD's Connected Intelligence group released a report indicating that most people use less than 2 GB of data per month with their smartphones and that unlimited data plans aren't necessary. Specifically, the firm said that just 11 percent of T-Mobile customers use more than 3 GB of data per month vs. 4 percent for AT&T and Sprint Nextel (NYSE:S) and 3 percent for Verizon. NPD noted that T-Mobile's users tend to be younger and more likely to view video and stream music.

Related Articles:
Schoolar: Sustaining the unsustainable – unlimited mobile broadband
Unlimited vs. metered data: Which pricing strategy will win?
Unlimited unnecessary? NPD report finds average smartphone data use is below 2 GB

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