Study Confirms What You Already Knew: Mobile Data Throttling About The Money, Not Stopping Data Hogs

from the it's-all-about-the-$$$ dept

Of the four national mobile operators, only Sprint still offers an "unlimited" data plan -- and most industry watchers expect that to go away soon. When the operators talk about this stuff, they complain about how unlimited plans are abused and the amount of data being used by so-called "data hogs" is crippling network bandwidth. Of course, the alternative story is that they just want to charge people higher rates, and putting a toll booth on data usage makes that possible. A new study by Validas confirms that the latter theory seems to match with reality. The company looked at 11,000 mobile phone bills of users on both throttled (tiered) plans and unlimited data plans and found... data usage was effectively the same. In other words, for all the talk about how tiers and throttles are needed to stop bandwidth hogging... reality shows that these plans have little impact on actual data usage. Or, to put it really simply: these plans are all about the mobile operators making more money and have nothing to do with network capacity.

Of course, as I've argued in the past, this is a pretty short-sighted strategy by the mobile operators. While they have every right to set up whatever business models they want in order to maximize profit, this might come back to haunt them. The problem with a tiered or throttled data plan is that it actually makes the mobile data service less valuable. Not only does it cost more for the same usage, it adds mental transaction costs as users have to keep track of their usage. That's only going to make people value alternatives much more. The carriers can get away with that if there are no alternatives (as is the case some of the time), but as more alternatives hit the market, expect people to shift their usage to networks they can actually use without fear.

Filed Under: bandwidth, bandwidth hogs, business model, caps, data hogs, spectrum, throttling, usage
Companies: at&t, sprint, t-mobile, verizon wireless


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  1. identicon
    dennisL, 27 Feb 2012 @ 6:12am

    Don't sell what you can't deliver

    For once, why won't the telco's come clean. They are marketing services they or their network can't or won't deliver. They KNEW what these phones were going to do to their networks but they got everyone to buy their Android and Apple phones only to pull the (or at least try) rug out from under everyone and then to start charging MORE for less. It's not the datahogs that's the problem. It's those idiots in marketing who are trying to sell something they can't provide.

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