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Summary:

[qi:107] Almost half of those currently subscribing to a mobile broadband plan are willing to cut such plans in order to make ends meet, according to research from Strategy Analytics (profiled at eMarketer). Two-thirds would keep their in-home broadband, while 48 percent would dump mobile data […]

[qi:107] Almost half of those currently subscribing to a mobile broadband plan are willing to cut such plans in order to make ends meet, according to research from Strategy Analytics (profiled at eMarketer). Two-thirds would keep their in-home broadband, while 48 percent would dump mobile data plans. Of course they would. Any thinking person who looks at the costs per megabyte realizes that like buying diapers in airports, you’re paying a premium for convenience. So it’s not as difficult to give these plans up when times are tough.

But those stats also make clear that the promise of ubiquitous mobile computing hasn’t become as important to the average consumer as it may be to us here at GigaOM. Simply put, plenty of people can live without constant access to the cloud. As much as we love our smartphones, mobile broadband access over a 3G network is still a luxury for most.

Indeed, paying up to $60 a month for 5 GB or $40 for around 250 MB isn’t for the faint of heart, or the thin of wallet. We’ve worried how the recession would affect mobile data plans, especially as employers stopped subsidizing them. However there are signs that wireless data may become less expensive. MetroPCS and Leap Wireless both offer cheaper mobile data plans, while Verizon recently introduced its MiFi device, which uses the 3G network to deliver a Wi-Fi signal.

Since it requires no software, multiple people could share the MiFi. My husband and I each have a data connection and are thinking it might make sense to consolidate down to one. As wireless broadband speeds get faster through HSPA or LTE network upgrades in coming years, more consumers may join the few folks out there who already use their wireless data plans as their primary web connection — eliminating a home broadband bill entirely. I don’t recommend that step for multi-user homes or for heavy video streamers, however.

  1. Paul Kapustka Wednesday, July 8, 2009

    Wonder if people ditching their 3G cards will lead Verizon and others to consider more-flexible billing plans — daily charges, say, instead of monthly/yearly lockins. If you didn’t have to pay for the card until you used it, maybe more folks would keep one around?

    1. I think that’s one of the best things better WiMAx coverage could cause — pressure the payment models for data. But it has to become more widespread. AT&T is considering alternative forms of payments, but i think the more innovative pricing will come from the prepaid carriers and Clearwire.

  2. And at those rates you need to be utilizing the plan a lot. It’s one thing to pay for that even if you only use 30% of the allotment when times are good – but when they’re not? You not only get the though “Gee, this is expensive” you get “…and I don’t use it that much.”

  3. And then there are those of us who live in countries where even the promotional mobile data plans are capped at 500MB with hefty charges afterward. Combine that with spotty coverage and it will be a long time before a ubiquitous cloud is a reality.

    (By the way I live in Canada, mobile data hell)

  4. Great analysis, I agree (mostly) with what you say. Abbreviated comments below, a more complete description is at http://hypecycles.wordpress.com/2009/06/28/no-cloud-in-sight/

    In the short term, services that are already “networked” will begin to migrate into the cloud. The migration may begin at the individual and SMB end of the market rather than at the Fortune 100. Email and CRM applications will be the poster-children for this wave. PMCrunch also lists some SMB ERP solutions that will be in this early wave of migration.

    But, this wave will primarily target the provision of application services through a different delivery model (application hosted on a remote server instead of a corporate server).

    It will be a while before cloud based office applications (word-processing, spreadsheets, presentations) become mainstream. The issue is not so much security as it is network connectivity. The cloud is useless to a person who is not on the network and until ubiquitous high bandwidth network connectivity is available everywhere, and at an accessible and reasonable cost, the cloud platform will not be able to move forward.

    The big question is this, will we ever get to the point where applications that can be perfectly well executed on a non-networked machine (word-processing, spreadsheets, …) ever become completely “cloud enabled”?

    I suspect not; the cloud will become more of a deployment model for a class of applications but we will see the pendulum swing (again) towards heavy applications.

    Your thoughts on this?

    Thanks,

    -amrith

  5. Over time there’s no question that the cost of data will come down thanks to the upstart innovators. In the meantime, if you use a smartphone from one of the carriers, your ‘data plan’ and 3G are a $60 bundle which means your phone becomes your modem. Otherwise, you pay up to $60/mo for 3G alone. Arguably, having a BB, iPhone, et. al. is the smarter play for the near-term, capped usage and all that jazz…

    The tension between the Bigs and users who want cheap/free access actually may work to the benefit of the Clearwires and others who will push the envelope and change the game for everyone.

  6. Well until the providers figure out a way to lower the prices I think consumers will continue to look to the growing number of companies that are actually offering mobile broadband for rent without having to sign up for a 2 year contract. I know for me the cost in the long term (2 years) was just too much for me to justify. I did find a way around the contract with a company called http://www.WifiRents.com I have used them a few times now and I think they are absolutely great for me. I have internet at home and work it is just when I am away on business or vacation that I need to take the internet with me, and that is exactly what their service has allowed me to do!
    Until the prices drop check them out as an alternative.

  7. It wouldn’t surprise me to find this is to some degree a function of the usability of the device. If it’s a nuisance to use data, where’s the harm of cutting off data services? If it’s one of the new brand of mobile devices where data is both critical and easy to access, you may feel differently.

  8. I have used Verizon’s data service for 2 years now….what a useless & slow service. As soon as WiMAX is rolled out in this region I will drop Verizon in a heartbeat…LTE is too far out.

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