The Mobile Broadband Data Pricing Conundrum

from the encouraging-data-usage dept

While this article paints a somewhat simplified view of the state of the Japanese mobile phone service market, it is accurate in stating that US mobile operators should be watching carefully how things are changing in Japan. Last year, as it was struggling to get subscribers to its 3G data service, NTT DoCoMo moved to offer flat-rate data offerings, which helped the service finally take off. However, competitive pressures have driven the price of service down — to the point that it’s cheaper than voice, encouraging users to use more data than voice to communicate with people. This has cut into revenues for the Japanese mobile operators, and DoCoMo has even said they wished they never introduced flat-rate pricing, even though it’s questionable if the company would have been able to keep signing up as many new subscribers without it. The situation in Japan is only going to get trickier, now that up to three new entrants are expected in the market — with one being Softbank, who shook up the broadband market in Japan with its very cheap YahooBB service. So, how will this impact the US? The mobile operators here have a standard pricing scheme they like to use — with early offerings costing a prohibitive $80/month — but that price drops as other services get more competitive. With more offerings about to hit the market, it’s likely that Verizon, Sprint and Cingular will all be forced to drop their prices on wireless data somewhat — and the situation may eventually mimic the Japanese one. Of course, the flip side of this, is that operators have a fine balancing act that they need to figure out. They want to encourage more usage, with cheaper prices, but they also don’t want to overload capacity constrained wireless networks with too much usage. So, the operators are likely to try to lower prices slowly as they make sure their networks really can handle the usage. Unfortunately, once they offer flat-rate pricing, it’s tough to back down — and the amazing thing about high speed mobile data networks, is that people will come up with applications and services for them that no one ever expected. There’s a good chance those apps will be bandwidth intensive and that could be a real problem for mobile operators who just can’t handle the traffic, but promised it with their flat-rate “unlimited” data plans.

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “The Mobile Broadband Data Pricing Conundrum”

Subscribe: RSS Leave a comment
1 Comment
acousticiris says:


The TOS for Verizon’s BroadbandAccess plan is so restrictive that virtually every user would at one point or another be in violation…even with casual use.
This makes it incredibly easy for Verizon to eliminate those pesky bandwidth hogs (defined as anyone who streams *anything* to/from their computer via the wireless network), and keep those casual users who chose to purchase the “unlimited” service out of convenience, but don’t actually use it very often.
Look forward to a set of termination letters that make the old Comcast methods look generous.

Add Your Comment

Your email address will not be published. Required fields are marked *

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...