The End Of "All-You-Can-Eat" Mobile Data Plans?

Following AT&T's decision in the US ten days ago (see my colleague Charles Golvin's take here), there's a hot debate as to whether European operators will follow suite and stop their unlimited mobile Internet pricing schemes.

O2 UK announced no later than last Friday that it will stop it and introduce various caps: from 500MB for the cheapest one (GBP25 with 100 minutes and unlimited texts) up to 1GB for the most expensive (GBP60 for unlimited voice/SMS and 1GB of mobile Internet).

According to the press release, 97% of O2 smartphone customers would not need to buy additional data allowances, as the lowest bundle (500MB) provides at least 2.5 times the average O2 customer’s current use. In short, just 3% of customers will have to pay extra.

Other UK operators as well as KPN in the Netherlands and Orange France have shared indications that they will follow suite and that this pricing scheme is outdated. Here are a couple of thoughts:

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AT&T's Revamped Data Pricing Is More About Tomorrow Than Today

 

This morning AT&T announced new data pricing for its mobile customers. Today's $30 per month unlimited use plan will be replaced by two plans:

  • $15 per month for up to 200 megabytes of data, with additional blocks of 200 MB at $15 each.
  • $25 per month for up to 2 gigabytes of data, with additional blocks of 1 GB at $10 each.

AT&T's CEO of Consumer, Ralph de la Vega, has publicly suggested on multiple occasions that network operators need to address the small percentage of subscribers that abuse unlimited usage plans and degrade the experience of others on the network. These suggestions have been met with howls by many, and I expect that we'll see similar reactions to this latest change. But will those reactions be justified? The answer depends on whether you believe AT&T's data on its current data users.

Mark Collins, AT&T's Senior VP of Data and Voice Products, told us that 65% of today's smartphone data users consume less than 200 MB of data per month, and 98% of them use less than 2 GB of data per month. These data plans then represent an opportunity for virtually all of AT&T's data customers to reduce their monthly data charges. For consumer product strategists, this change shows a remarkably (and, for some, surprisingly) customer-centric viewpoint. Why?

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