Stating The Obvious: Unlimited Data Plans Increase Usage

from the you-think? dept

Sometimes it’s fascinating to see the type of research reports that analyst firms put out. For example, one firm has put out a report supposedly warning all these wireless firms hyping up “unlimited” plans that unlimited plans tend to increase usage. You think? Really? One would have hoped, given the long history of unlimited usage plans in other fields, that the mobile operators would have understood the basic economics equation in moving to such plans. Of course, what this also ignores is that the same “unlimited” usage often helps create much greater value because it opens up the possibility of new applications and services that simply weren’t possible before. If the internet had remained a pay-per-hour solution (as it was for many in the early years) it never would have become nearly as useful, and the value of having an internet connection would have been significantly lower. So, yes, it can increase the strain on a network for providers who aren’t prepared (or unwilling to understand the basic incentive structure), but it also tends to increase the overall value of having access. And that should only mean good things for the firms that offer such access.

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Comments on “Stating The Obvious: Unlimited Data Plans Increase Usage”

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8 Comments
Jake says:

Moral Of The Story

I think ISPs can learn two things from this:
1. It might be advisable to be more up-front about the fact that ‘unlimited access/space/whatever’ actually means ‘as much access/space/whatever as we can give you before our servers collapse under the strain’.
2. You can bet your bottom dollar that someone somewhere will push you to those limits and very possibly beyond if you don’t stay on your toes, even if it’s because they’re doing something you thought only ever happened on ‘The Daily WTF?’.

crypto says:

why are U wining

Carriers make money on time with voice. talk 15 min billed for 15min of usage of the network. Data connect under unlimited. Revenue is based on total 30day data KB used divided by month fee. The more use the less bandwidth is available for voice less money they make per bandwidth used. Which with voice the more of the network bandwidth is used more revs are generated. not so with data. plus they are not participating in rev associated with the value of the data being transported on their network. don’t get me wrong I do not have sympathy for them but the value metrics you state. Where is it for the transport? There is no comparative value to voice for the carrier to provide any data on the networks. They do it because they have to. .

hey once we are at ip v6 then all data on any network will be giving a value per kb. Wait till we the bill for that. And state taxation associated with it. Does anyone think that this anarchy of free internet data on a public network will continue forever. If carriers actually sold unlimited data cheaply you would be calling your office and get a fast busy because the network would be filled with data instead of voice calls. You say build more towers and buy more bandwidth. 600,000.00 per cell site and give it away with data. Even if they sectorize the site the maximum number calls or data connection on that site do not justify it’s build. Lengthen the ROI for it allowing large amount of data on it. No matter how you slice it data doesn’t make the same $ per bandwidth as voice. They are just showing the reluctance to data integration by high prices. My two cents anyway.

Anonymous Coward says:

Left/Right Hand

CEO to Marketing:

“Raise sales. That’s your prime objective.”

“Ok… when we advertise unlimited, we get a 20% increase.”

“Good Job!”

CEO to Networking Staff:

“Keep it running smoothly. That’s your prime objective.”

“But… we don’t have enough infrastructure for all the bandwith our customers are using.”

“You’re failing! Do SOMETHING, or you’re out of here.”

“Uh… I guess we could implement hidden bandwidth caps…”

I see different departments in companies working at cross purposes all the time. It’s one of the things that drags down large corporations (I’m looking at you, SONY).

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