Buying Mobile Broadband? Don’t! (Until You Read This)

As iPads, smartphones, Android tablets, e-book readers and other connected devices vie for consumer dollars, you’d think it might be the best time to buy a mobile broadband plan, right? I’d argue that it might actually be the worst, or at the very least, a time to be aware of the many new choices available.

Yes, we want the mobile web on every gadget, and we want it to work everywhere we go, but the U.S. mobile broadband market is in the midst of a big change, with faster 3G networks arriving and the end of unlimited data plans. It gets worse in the coming months with competing 4G networks, giving consumers much to think about when choosing a mobile broadband plan. (Related: 4G Plan Update: Who’s Doing What With Mobile Broadband Through 2013)

Indeed, had someone asked me just six months ago about what data plan to buy, my answer would have been very different from what it is today. At that point, all four major carriers had mature 3G networks; there were fewer prepaid options available; and only one 4G network was available. From then to the end of this year, just look at the changes:

• T-Mobile’s HSPA+ network implementation will be completed this year, covering 185 million people with theoretical 21 Mbps speeds currently as fast, or faster than Clearwire’s 4G network.
• Clearwire’s WiMAX rollout continues with service coming to three major cities in the next two months – San Francisco, Los Angeles and New York City — adding another 13 million people covered by the network.
• AT&T still offers a 5 GB data plan for USB dongles, but began limiting data on new plans for smartphones and iPads to buckets of 200 MB and 2 GB in June, which can save consumers money over the old, higher-priced plans.
• Before the end of the year, Verizon Wireless will cover 38 cities and roughly one-third of the U.S. population with a new 4G data network using LTE technology.
• Value-player Cricket now offers nationwide 3G roaming – increasing its potential customer base to 280 million people from 92 million — and is now able to offer mobile broadband pretty much everywhere.
• Sprint-owned Virgin Mobile is undercutting the competition for 3G with prepaid service: $40 nets you a month of truly unlimited 3G data with either a mobile hotspot for multiple devices or a USB dongle for one computer.
• Also in the prepaid market, Clearwire’s new Rover brand offers inexpensive unlimited 4G service for the commitment-shy looking for fast speeds. Use as much 4G data as you can at $5 per day, $20 a week or $50 for a month.
• Tethering options that allow you to use your 3G or 4G smartphone as a mobile hotspot are becoming prevalent, with all four major carriers offering or planning to offer the ability for $15 to $20 per month. (Note that you may not be getting any additional data to use; you’re just getting to share the data plan that comes with your handset.)

Even with a myriad of new choices currently available and coming soon, the same decision points hold true for any mobile broadband purchase. First and foremost, consider the locations you plan to use the service. If a carrier doesn’t offer wireless data coverage where you work or live, you’ll simply be paying for service you can’t use. I made that fatal mistake once before and the error cost me $175 to get out of my contract.

Think too about how often you’ll be using mobile broadband and for what activities. A person who travels once a month for a week at a time may not need to purchase a higher priced monthly plan when a short-term prepaid option could do the trick. Or if you have a 2 GB plan for your smartphone and see you’re only using a small portion of it, a tethering plan might be your best bet. Just bear in mind that using a phone as a MiFi-like device can drain the battery faster, leaving you with no web connection and no phone. Of course, if you’re expecting to do heavy video streaming or use a mobile broadband plan for a full-time Internet connection, seeking out an unlimited service is the way to go.

Now might not be the time for a data plan commitment, either. Often a carrier will subsidize the hardware needed for a data plan, provided you sign up for a two-year contract. With Verizon’s new LTE network soon launching, Sprint’s continued WiMAX expansion, and both T-Mobile and AT&T planning to further increase speeds next year, being a data “short timer” might be beneficial now. In light of that, a prepaid plan or some other no-contract offering might be the best way to hedge bets against the coming mobile broadband tsunami of 2011 and beyond.

Related content from GigaOM Pro (sub req’d):

• 4G State of the Union
• Mobile Broadband: Pricing for Profit
• Metered Mobile Data Is Coming and Here’s How