Q: How Much Is Too Much To Charge For 3G Data? A: $80
At the CTIA wireless show, we heard a lot of talk about network upgrades to allow for faster data speeds. It seemed to me that all the carriers took a more aggressive tone towards investing in network upgrades than in previous years, with AT&T Wireless indicating it would meet its 3G commitments, VZW announcing national EV-DO, and Cingular talking about EDGE. Despite that, the actual rhetoric coming from the carrier executives was one of caution regarding mobile data investments. Sprint PCS found itself needing to defend its position for not following VZW’s EV-DO buildout, making the (very true) case that waiting for EV-DV allows them to amortize the investment cost against the much more significant voice portion of their business (EV-DV increases voice spectral efficiency, as well as data). Nextel’s CTO, Barry West, said that they were still considering a number of possible high-speed data technologies, not just Flarion’s. He said he has yet to find a solution that offers similar economics as DSL or cable. Ultimately, West thinks that the $80/mo. price point which has been the mainstay of unlimited mobile data access (Ricochet, EDGE, GPRS, 1xRTT, and now EV-DO were ALL offered at $80!) is simply too high to attract a mass market, and that prices need to be brought down to the half-century mark before the adoption numbers grow much. We agree entirely with this pricing argument, however, the pickle is that any wireless data network solution has a limited capacity, so lowering the price and getting everyone on board risks overloading the network.
Filed Under: 3g