Leap Wireless, the company behind the Cricket prepaid wireless service, today announced new data plans that more closely tie the price of mobile broadband to how much data a user consumes. However, instead of overage fees for users who exceed their plan, Leap will slow down their service. Leap is merely the latest wireless carrier to attempt to change the way it sells data, and with its moves, it looks like we’re seeing two models for usage-based mobile broadband pricing emerge in the U.S.
All Cricket phone plans are pay as you go, with no contract required. For the budget-conscious, they are now offered with multiple data plans based on expected monthly usage on Leap’s 3G network. The new monthly plans are priced at $40, $50 and $60, which allow customers to consume 2.5 GB, 5 GB and 7.5 GB, respectively. Users exceeding the prepaid monthly data cap will not incur overage fees, but Cricket will throttle data speeds for consumption in excess of the plan cap. This new tiered pricing increases costs over Cricket’s previous data plan, which was 5 GB for $40. The model of throttling after a user exceeds her data plan is similar how T-Mobile handles overages.
Cricket is also offering unlimited data plans for Android and BlackBerry phone owners that are not capped in any way. Today it launched its first smartphone (the BlackBerry Curve 8530 which will cost $299), and it plans to launch an Android phone later this summer. The Android True Rate plan is $55 monthly, and the BlackBerry plan is $60. Like the tiered plans, these unlimited plans are contract-free.
The method of charging flat rates and throttling over-consumption is an alternative to the more common overage plans of AT&T and Verizon. The nation’s top two carriers charge hefty overage fees for data consumption that exceeds the allotted monthly data cap, and in June, AT&T said it would do away with unlimited data consumption on smartphones for new subscribers. Plans with overage fees generate uncertainty over how much the monthly bill may end up being for periods of heavy usage, and may make users leery of using certain services.
The explosive growth of smartphones has led to larger portions of the carrier’s networks being consumed by data, and both the tiered and capped plans (sub req’d) are attempts to derive value (sub req’d) from that high usage. The desire to recoup investment will only grow as carriers build out future 4G networks to handle the anticipated data requirements in the near future.