I have an embarrassing confession to make: for the greater part of last year I subscribed to that 200 MB plan. Yes, yes, for shame. I’m a wireless technology writer. What am doing with a plan many of you would only advise your grandmothers to buy? In my defense I am a) very cheap and at the time was paying my own mobile bill (no longer, thanks GigaOM!), and b) am not really a gadget nor app writer (we have another Kevin who’s much better at it than I am). It’s sad to say, but I’m more intrigued by the radio connection between the phone and the network than by the phone itself.

But to be honest, I also really wasn’t consuming that much data – at least not on the mobile network. While in the wild, my primary smartphone use was email, social networking, maps and web surfing. I’d listen to Pandora and watch the occasional video, but I was also chintzy enough that I made sure to take advantage of every Wi-Fi access point available. Also, years of being an AT&T customer had trained me to save my app and bigger file downloads for home or work where a broadband network was readily available.

I still went over my 200 MB budget – quite often actually, and since this was before the throttled “unlimited” plans were introduced, I paid for that extra data. But the additionally overage charges I incurred were still far cheaper than the additional $20 a month I would have paid for a 2 GB plan (since then T-Mobile has lowered data rates considerably). I realize that 200 MBs may see like an intolerably low amount of data to many of you, but at the time it was all I needed, and I was using my smartphone constantly.

Of course, like all smartphone users, my data hunger became more ravenous. Overage charges eventually well exceeded the cost of upgrading to the next data, and I was also sick of the fact that I couldn’t use my phone as a mobile hotspot. Today I’m a 5 GB per month customer, and ironically my typical monthly data usage is even less now than it was last year. Because I now work from home, I’m rarely ever off Wi-Fi, but in months where I travel that usage shoots well into the multi-gigabyte range.

I can understand T-Mobile’s reasoning for shutting down the 200 MB plan, though. It recently reported that its average smartphone user consumes 760 MB a month, and a customer on one of its super-fast 42-Mbps HSPA+ devices eats up a whooping 1.3 GB. At such levels, there are few smartphone users that can reasonably expect to remain under the 200 MB thresholds each and every month. The difference between the 200 MB and 2 GB plans was only $10, as well, so arguments for thriftiness go out the window.

But, it’s never good to see a carrier reduce the number of data options its customers have, especially a carrier like T-Mobile, whose reputation is built on undercutting the other carriers on price. The average consumer may have outgrown the 200 MB but I guarantee there is still a substantial minority of people out there who are either using their smartphones sparingly or fighting tooth and nail to keep as many megabytes off the cellular airwaves as possible. I should know: I was that customer just a year ago.

Photo courtesy of Shutterstock user Alistair Scott

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Verizon’s structure is pretty simple. Pay a per-device monthly fee ranging from $10 for a tablet to $40 for a smartphone and then buy a bucket of data starting at $50 for 1 GB and going up to $100 for 10 GB. AT&T, however, is using a sliding scale to determine the amount your charged for each smartphone. For instance a family buying a 1 GB plan would pay $45 per smartphone connected, while the same family would pay only $40 per phone if they signed up for a 4 GB plan.

In general, the prices AT&T charges for the actual data buckets start off cheaper than Verizon’s equivalents, but as you get into the upper tiers, Verizon starts offering better volume discounts. For instance at 6 GB, Verizon charges $80 while AT&T charges $90. But at that tier AT&T is charging a $35 per-device fee. So four smartphones sharing 6 GB plans costs roughly $230 a month, while the same setup on Verizon costs $240. If you move down to two smartphones sharing 6 GB though, both carriers’ prices wind up being the same, $160.

Both carriers are charging the same rates for connecting non-smartphone devices and customer overages are being billed at the same rate: $15 per gigabyte. The new Mobile Share plans will be available in late August.

The biggest shocker is that AT&T is making these plans strictly optional – and not just for existing customers. New customers can still sign up for the revised individual data plans AT&T implemented in January – which in the case of individual customers could wind up being the cheaper option by far. And don’t worry, unlimited customers, your plans remained grandfathered.

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T-Mobile is still offering “classic” and “value” plans, with the latter charging cheaper rates to customers that buy or bring their own devices. But T-Mobile is further subdividing those categories into consumer and business plans. The consumer plans are subject to T-Mobile’s normal soft caps, meaning speeds will be throttled back when customers reach their monthly data allotments. The business plans, however, won’t be throttled. Instead, overage fees ranging from 2 to 10 cents a megabyte will kick in when the hard cap is exceeded. That works out to $20/gigabyte for higher tiers (expensive, but not entirely unreasonable), but scales up to $100/gigabyte for the 500 MB plan (essentially highway robbery).

While any customer can buy either plan, T-Mobile said the overage-fee plans are targeted at business customers who need to keep their high-speed data connections at all times. There’s an advantage to signing up for hard-capped data though: the business plans are between $3 and $5 cheaper than their consumer counterparts.

Apart from introducing the new 500 MB tier — which costs between $20 and 30 depending on the plan — T-Mobile has also tinkered with its existing plan pricing, adjusting some rates upwards and others downward. For instance, you’ll now pay $2 less if you sign up for a classic 2 GB plan ($38/month), but you’ll pay $2 more than you would have previously if you take the equivalent value plan ($32/month).

The end result is that T-Mobile’s value plans are becoming slightly more expensive, which runs counter to its stated policy of driving more customers to an unsubsidized handset model. T-Mobile also launched new prepaid pricing plans last month.

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T-Mobile this week revealed just how much that typical smartphone user on its network consumes: 760 MB per month. What’s more subscribers that have its 42 Mbps dual-carrier HSPA+ phones such as the new HTC One S gobble up an astonishing 1.3 GB a month, which proves the obvious: faster networks mean more data used. T-Mobile CTO Neville Ray revealed these details at the NGNM conference in San Francisco during a slide presentation (pdf) that was first reported by the eagle-eyed folks at FierceWireless.

Those figures may not seem huge to GigaOM readers, whom I’m betting tend to be power users. But let’s put those numbers in perspective. Cisco Systems’ Visual Networking Index calculated the average U.S. smartphone in 2011 consumed only 201 MB per month. Globally, Ericsson’s Traffic and Market Report found that in the first quarter iPhones and Android devices consumed roughly 350 MB per month. T-Mobile’s typical user either doubles or triples those numbers depending on which report you go by, and its power users break the bank completely.

It’s possible that Sprint’s average smartphone usage exceeds T-Mobile, but I doubt it. Sprint does still offer unlimited plans, but a large portion of its smartphones are on its CDMA network, not its soon-to-be-retired WiMAX service. Just as faster speeds increase data consumption, slower speeds limit overall data use. Plus Sprint doesn’t extend free mobile hotspot capabilities to its customers, meaning subscribers are limited to the data they can access directly from their phone screens.

We won’t know, though, until the carriers release information on their average usage rates, which they are loathe to do (in fact, I’m surprised T-Mobile did so). Carriers typically keep that data confidential because if it were it public, it would be glaringly obvious how much we’re getting ripped off. While it’s hard to argue with Sprint’s unlimited policies, AT&T and Verizon both have historically priced their data tiers in ways that nowhere near reflect how the typical smartphone behaves.

According to Chetan Sharma Consulting, only 30 percent of U.S. smartphone subscribers exceed 1 GB each month, yet their most common tiers are 2 GB and 3 GB plans. American consumers are paying for a lot of data that they couldn’t possibly consume. Verizon is rectifying that situation, in part, with new shared data plans that scale down to 1 GB a month, but it’s making up the difference by charging customers for required unlimited voice and SMS plans – arguably robbing Peter to pay Paul.

So why is T-Mobile releasing its numbers all of sudden? Well, for one, it has a lot less to be embarrassed about. Though its customers are still well below their caps, T-Mobile customers pay a lot less for data are consuming much more of the allotment they pay for. Also, T-Mobile is trying to convince regulators to nix Verizon’s proposed acquisition of the cable operators’ spectrum. Its key argument is that Verizon is a lousy steward of the public airwaves. By showing just how much its subscribers consume over the limited spectrum resources it owns, T-Mobile is betting it can shame Verizon in front of the Federal Communications Commission.

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When Verizon first unveiled Viewdini last week, I speculated that Verizon might make the app the first to implement ‘toll-free’ data policies, meaning that content providers would pay the network carriage charges instead of their customers. That turns out not to be the case.

Viewdini is subject to the same data metering as any other app (or throttling restrictions in the case of Verizon’s grandfathered unlimited customers). It also just so happens that Verizon is ending its double data LTE promotion next week, which means new customers will have to settle for its normal, and rather pricey, mobile data tiers.

It’s easy to see how customers can run up some hefty data bills using the service – full-length TV shows and movies can consume enormous amounts of bandwidth. The service itself, though, seems pretty innovative as it aggregates content that would normally be trapped behind specific apps. Viewdini lets you view video from the services to which you subscribe and allows you to buy or rent other content.

You can check out The Verge’s review here, which while generally positive found the absence of major streaming sources such as Vudu and HBO Go disappointing. Verizon has said it’s still in negotiations with other content providers and plans to add more video sources, including its own FiOS TV, in the future.

As for data restrictions, I wouldn’t be surprised if Verizon is still in discussions with these content providers about revenue-sharing deals that could offset the cost of delivering their video. It would be quite a compelling service if all or part of the content was off the meter and certainly a differentiator for the content providers that agreed to it. I’m not quite sure if Netflix and Hulu are ready to open up that Pandora’s Box though. For now Netflix seems more interested in helping its customers get around data caps by avoiding cellular entirely.

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Here’s the full statement as published in the Gray Lady’s Bits blog:

• Customers will not be automatically moved to new shared data plans. If a 3G or 4G smartphone customer is on an unlimited plan now and they do not want to change their plan, they will not have to do so.
• When we introduce our new shared data plans, Unlimited Data will no longer be available to customers when purchasing handsets at discounted pricing.
• Customers who purchase phones at full retail price and are on an unlimited smartphone data plan will be able to keep that plan.
• The same pricing and policies will be applied to all 3G and 4GLTE smartphones.

What that means is that you can probably cling to your unlimited plan from now until the end of time, like some old codger that refuses to give up his party line. But Verizon isn’t going to make it easy on you. The people who like unlimited data tend to be the people who like high-end smartphones, and since Verizon will no longer cut them deals when they upgrade to newer and better devices, they’ll be on the hook for full sticker price. I’m not sure if you’ve seen the prices on a brand new unlocked iPhone lately, but they ain’t cheap: $650 to $850 depending on the model.

The odd thing is, depending on how they’re priced, Verizon’s new shared plans might actually wind up saving a lot of current unlimited customers money. For instance, if you’re in a household with two smartphones both grandfathered to unlimited, you’re basically paying $60 a month for data. If Verizon keeps its same pricing structure in place you could get 2 GB to share for half the monthly cost, plus whatever per line charges Verizon chooses to charge.

The larger majority of U.S. smartphone users consume less than 1 GB of data a month. There are still plenty of people who use their unlimited data plans to the hilt – many of them GigaOM readers – and they’re going to hate this policy change in the very cores of their beings. But my bet is that a lot of people currently on unlimited plans might benefit from switching over to shared data. We’ll have to see the details of Verizon’s shared pricing, though, before we can say for sure.

Buffet image courtesy of Flickr user Wesley Fryer

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For this post, I’m just tackling the Big 4, exploring the price-per-gygabyte differences between their most common mid-tier smartphone and tablet/modem plans. I should point out there are several other regional carriers, like MetroPCS, and innovative new virtual operators, such as Republic Wireless, that are overturning the norms of mobile data pricing. But I’ll get to them a separate post. Like it or not, Verizon(vod), AT&T, Sprint and T-Mobile are the operators the overwhelming majority of us look to for mobile services.

Smartphones

All of the operators offer a myriad of data plans at different price points and megabyte allotments, but for the purposes of this post we identified each of the carrier’s $30 plans (which in some cases required ferreting out the data portion of their bundles). The idea here is to show who offers the most bang for your buck in what we consider a reasonable mid-tier plan. Keep in mind, though, that some of the big bucket plans are only a deal if you really use them. If you’re like most U.S. smartphone users you probably consume less than 1 GB a month.

• Sprint Unlimited (The name says it all): Sprint is the last major operator to offer truly unlimited smartphone access without throttling to its 3G EV-DO and 4G WiMAX network (where it’s available). Also, you can’t use your phone as a hotspot unless you sign up for an additional $30 upgrade, which caps tethered data at 5 GB ($6/GB).
• T-Mobile Classic 5 GB ($6/GB): T-Mobile calls all its plans unlimited, but it throttles back speeds once you hit your monthly cap on its HSPA+ network. That doesn’t mean it’s not the next biggest bargain after Sprint (though Classic plan prices are set to increase). But T-Mo is also on oddball since it has separate pricing structures depending on whether you opt for a subsidized device. If you bring you own device or buy your phone upfront, you can take advantage of a T-Mobile Value plan and save $5 off the normally $30 plan price, which adds up to $5/GB. All of T-Mobile’s upper tier plans also allow you to use your phone as a hotspot at no extra charge, so if you tether your phone you stand a pretty good chance of actually using up your 5 gigs.
• AT&T DataPro 3GB ($10/GB): AT&T recently hiked prices for new customers on its HSPA and LTE networks, but in the process it drove down the cost it charges for a megabyte. The end result is new customers pay a $5 premium over the old $25 plan, but they get an extra gig. That works out to be a savings of $2.50/GB. AT&T is still much pricier than Sprint and T-Mobile, and it doesn’t allow you to use personal hotspot features unless you upgrade to the $50 tier.
• Verizon Data for Smartphones: 2 GB ($15/GB): Verizon Wireless is by far the most expensive mobile data provider, though when you get into the elevated tiers it does cut you some slack.. If you’re willing to commit to 10 GBs a month, you pay $8/GB, and it charges for overages at $10/GB. To use your phone as a hotspot you need to buy an additional 2 GB for $20. Verizon has always taken a get-what-you-pay-for attitude. It may be expensive, but it has both the most extensive 3G and LTE networks.

Tablets and mobile broadband

The smartphone rankings practically invert when it comes to tablet and modem pricing. It’s worth noting that with tablets and hotspots, the differences in data buckets really matter to the average users. While it might be hard to eat up multiple gigabytes on a smartphone, it’s actually quite easy on an iPad. We aimed for the $30/month mark here as well, but not every operator has a plan at that price point. So instead we took the closest plan to $30 each offers and calculated the cost per gigabyte.

• AT&T Data Connect for Tablets ($10/GB): AT&T has a bunch of different types of plans for its non-smartphone devices but once you get to the $30 tier they pretty much work out to $10/GB (including overages). The exception is if you buy a subsidized Android tablet on contract, where a 3 GB plans costs $35. Also, if you sign up for a laptop, hotspot or dongle plan, your minimum commitment is $50 for 5 GB.
• Sprint Mobile Broadband ($11.67/GB):  Sprint stopped selling unlimited data plans for everything but smartphones last October, and the data tiers that replaced unlimited aren’t very exciting. It’s closest tier to $30 a month is $35 plan with 3 GB of data for tablet and hotspot plans. What’s more Sprint charges some pretty punitive rates for overages: 5 cents a megabyte, which works out to be an extraordinary $50/GB.
• Verizon Mobile Broadband ($15/GB): If anything Verizon is consistent. It charges the same data rates and overage fees for smartphones, tablets or modems, as well as for contract and prepaid services. The pricing here is for the standard $30/2 GB tablet data pricing plan, but if you opt for a subsidized hotspot of dongle the minimum charge is $50 for 5 GB.
• T-Mobile Mobile Broadband ($20/GB): T-Mobile’s progressive data pricing in smartphones becomes awfully regressive when you get to tablet and modem plans. Its cheapest $40 tier gives you a only 2 GB of unthrottled data. If you go for the unsubsidized device or bring your own tablet,  prices drop by $10 ($15/GB), but that’s still hardly the deal of its smartphone plans.

Sale image courtesy of Flickr User Peter Kaminski

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Over the weekend, blogger John Cozen posted a recent e-mail exchange with AT&T about why his smartphone data connection was slowed down after he breached 2.1 GB in his last billing cycle. His argument was his usage couldn’t be subject to throttling since his data use must be well under the top 5 percent cut-off AT&T stipulates in its terms. AT&T’s response was very interesting:

“To give you a baseline – the average data use across the country by the top 5% of AT&T smartphone customers was 2GB per month, effective August 2011. The amount of data usage of our top 5% of heaviest users varies from month-to-month and by market, based on the usage of others and the ever-increasing demand for mobile broadband services. To rank among the top 5%, you must use an extraordinary amount of data in a single billing period.”

When AT&T introduced throttling in October, its highest-tier data plan was 2 GB for $25, compared to the $30 charge for unlimited plans that Cozen and millions of older AT&T customers still hold on to. That seems reasonable enough. If the 2 GB is what the top 5 percent of smartphone users consume and is at the level AT&T considers abusive, then 2 GB is a good place to set its cap, charging customers more if they exceed it.

But AT&T just overhauled its plan pricing. It’s newest mid-tier plan charges customers $30 for 3 GB. Why is AT&T inviting new customers to consume a full gigabyte more of data while telling older customers – who pay the exact same monthly fee – that 2 GB of data is excessive? My bet is that the former is really a false invitation.

When AT&T first announced these new plans, I wrote there was good and bad in them for consumers. The bad is that new subscribers will have to pay $5 more a month than their predecessors for any of AT&T’s plans. The good is that AT&T is actually lowering the per-MB charges on data, which is ultimately necessary if average mobile broadband consumption continues to grow. Now I’m not so sure.

If 2 GBs is the average use for AT&T’s 5 percent hungriest users, that means 95 percent of AT&T’s customers are well under 2 GB each month. So the vast majority of A&T customers don’t get any real benefit out of the new 3 GB plans. To them it just amounts to a $5 a month price increase.

To be fair, AT&T can’t just price for what its customers are consuming today. It has to price for where they’re going, otherwise it would just be adjusting its rates every few months. It’s not unreasonable to assume that its customers average monthly data consumption will grow beyond 2 GB in the next few years, especially as mobile video services take off. AT&T is also a business that wants to make money off of mobile data, though this may be a rather sneaky way of doing it. Ma Bell’s data rates still far undercut those of its main competitor Verizon Wireless, however.

But AT&T also claims to be facing a capacity crunch. Since its planned acquisition of T-Mobile has failed, the carrier has used every podium it can find to proclaim that its networks are reaching critical mass in an effort to justify its spectrum acquisition aims. On its fourth quarter financial call, AT&T Randall Stephenson even blamed the government’s failure to let it have T-Mobile as the reason why its forced to raise data prices.

If AT&T is so network constrained, if 2 GB of monthly usage is too much for its networks, and if it doesn’t have the spectrum to meet future demands, then why is it opening up the data spigot, actually encouraging its customers to consume more for an extra $5 a month?

iPhone image courtesy of Flickr user mark sebastian

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