Mobile Operators Go Unlimited... Just As ISPs Insist They Need To Charge Per Byte?

from the please-explain... dept

There was a ton of press coverage yesterday over the fact that one-by-one, Verizon Wireless, AT&T and T-Mobile all announced $99 "unlimited" calling plans, ahead of Sprint who had actually been rumored to be gearing up to launch just such a plan. There were a few different storylines that could make this interesting. For example, it's not clear why it's such a huge deal when regional operator MetroPCS has been offering unlimited calling for ages (at a cheaper price). Hell, AT&T Wireless (when it was run by current Sprint CEO Dan Hesse) launched a $99 unlimited calling plan almost exactly a decade ago.

However, what really struck me as interesting is seeing all of these companies rush towards "flat-rate, all-you-can-eat" pricing, just as broadband providers are insisting they need to switch from flat-rate, all-you-can eat pricing to metered pricing, which some pundits are insisting is a better system. So why is it that one group of companies is moving in one direction, while the other is going in exactly the opposite direction? There are a few factors, but the biggest is the competition issue. Mobile operators are doing so because they feel forced to by competitive pressures (which is evidence in those three companies all announcing plans on the same day, in part out of worries that the fourth would beat them to it). As has been pointed out over and over again, the same simply does not exist in the broadband world in the US to the extent that it does in the mobile space. Some might also point out that capacity questions are different for both sets of providers. Mobile phone operators likely have fewer capacity issues to deal with as a result of unlimited calling than broadband providers do with unlimited internet access plans. However, mobile operators certainly are no strangers to capacity issues -- and they mostly dealt with it by (gasp!) investing in infrastructure so they could support unlimited plans.
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Filed Under: all you can eat, broadband providers, flat rate, metered, mobile operators
Companies: at&t, sprint, t-mobile, verizon wireless

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  1. identicon
    Woadan, 20 Feb 2008 @ 1:20pm

    The cellular voice network does not transmit data. So comparing the unlimited cellular voice plans to the landline (either copper, fiber, or coaxial) data plans is nearly comparing apples to oranges.

    Verizon charges $35 for DSL at about 3Mbps down and 768Kbps up. Verizon Wireless charges $59.95 for up to 5GB of data transfer on the wireless data plans, whether it is a modem or a phone that uses the data. And Ev-DO Rev A is near-DSL speeds, but not quite as fast.

    So what is it about cellular data that makes it intrinsically more expensive to transmit then DSL? If you compare FTTP vs. Cellular data, it gets worse, though the price goes up to nearly the same amount for the basic FTTP plan.


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