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Sprint, T-Mobile believe in shared data plans too — just not for consumers

Kevin Fitchard — Mon, 04 Mar 2013 18:44:30 +0000

Both Sprint and T-Mobile have dissed the decision of their larger competitors TO move to shared data plans, claiming consumers would rather have big data buckets or unlimited use available through their individual plans. But apparently that logic doesn’t apply to business customers.

T-Mobile has said it plans to offer shared data pools to its business customers, and on Friday Sprint officially began selling buckets of communal data to its small business customers. The plans are only available through its business sales channels and support a maximum of 30 LTE smartphones, tablets and data modems. Like AT&T and Verizon, Sprint is charging a monthly per-device fee, for instance $40 for a smartphone with unlimited talk and text included. The pricing of the data plans themselves start at $140 a month for 20 GB split between up to 10 devices. At the high end is a 60 GB / $320 plan supporting up 30 lines.

Sprint is also offering a set of shared plans targeting data-only tablets and modems — an interesting use case brought on by the BYOD trend. As employees make their personal smartphones their business handsets, companies may opt to make the tablet or a wirelessly connected laptop the only mobile work tool available to their employees. Sprint is charging $10 a month to connect a tablet, $20 to connect a modem, and offering shared data plans starting at $60 for 10 GB and topping out at 60 GB for $320.

Since last summer Sprint’s mantra has been “Say no to sharing data,” and it has launched advertising and web campaigns that attempted to show how consumers could save money by adopting its individual unlimited plans. Both Sprint and T-Mobile have maintained that not only do subscribers get a better deal with their unlimited plans, but also THAT the lack of A cap makes everything so much simpler.

Why the change of heart when it comes to business plans then? Likely, Sprint and T-Mobile are realizing that the same arguments that work with consumers aren’t going to work with businesses. Small companies value simplicity as well, but they’re willing to take on some complexity if it means saving some cash each month. And on account with 20 or 30 devices, those savings could be substantial.

Buying two unlimited plans at $30 a month for unlimited data might make sense for a family of two, but paying $500 to $600 a month to attach 20 smartphones to the unlimited spigot makes little sense if you can buy an enormous bucket of gigabytes for half the cost. Keep in mind, as well, that neither T-Mobile or Sprint offer unlimited plans for tablets or modems, so any business owner connecting anything besides smartphones would have had to manage caps under the old pricing plans anyway.

I don’t think Sprint and T-Mobile are swallowing the data-sharing pill just yet. For them unlimited is still a key differentiator in the consumer market, but they are likely very concerned that Verizon and AT&T will steal their business customers with these new shared pricing models. That has forced them to respond in kind.

In Sprint’s case at least, it isn’t just responding, it’s attacking. Sprint’s new plans undercut Verizon’s recently launched small business tiers. For instance, Verizon is charging $375 a month for 50 GB of shared data between, while Sprint is offering 60 GB for $350. Sprint and T-Mobile may be forced to play the data share game, but it looks like they’re going to maintain their reputations for offering cheaper service.

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The average US subscriber owns 1.57 mobile devices

Kevin Fitchard — Mon, 22 Oct 2012 21:34:14 +0000

How many mobile devices do you own? According to Wireless Intelligence, the research arm of the GSM Association, the number is 1.57 if you’re an average American subscriber. It’s even higher in the rest of the world, coming out to 1.85 mobile connections per subscriber.

If those numbers seem kind of high, it’s because Wireless Intelligence has done a bit more digging into the numbers. Instead of merely dividing the total number of mobile connections by a country’s population, it’s focusing exclusively on mobile device users – infants, Luddites and other non-phone owners don’t factor into the final figures. In addition, WI is eliminating the machine-to-machine (M2M) communications from its count. So what’s left are 225 million unique U.S. subscribers (71 percent of a the U.S. population) that own a combined 354 million mobile devices.

A lot of the 1.57 can be chalked up to people owning separate phones for work and personal use, but according to WI Senior Analyst Joss Gillet, connected tablets and laptops, and 4G modems are starting to make big contributions as well. New shared data plans from AT&T and Verizon will only spur multiple-device adoption.

Globally, overall penetration levels are lower – only 45 percent of the world population owns a mobile device – but on average those customers tend to have more than one connection. This can be explained in part by the growing popularity of dual-SIM card devices in developing markets.

Photo courtesy of Shutterstock user Stanislav Komogorov

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AT&T stops subsidizing tablets. Now let’s make tablet data cheaper

Kevin Fitchard — Mon, 20 Aug 2012 16:33:33 +0000

AT&T has finally come to the conclusion that subsidies don’t make sense when it comes to selling tablets. Over the weekend, Engadget uncovered a document stating that AT&T would it would start selling all its 3G-4G tablets at full price, eliminating the contracts that come with them.

The Verge confirmed with store representatives that the policy change will start Monday, and in fact, AT&T’s $35/3 GB contract tablet plan has disappeared from its website. AT&T only subsidized Android slates, not the iPad, so the impact won’t be huge. AT&T also isn’t the only operator to dump tablet subsidies. Verizon did so in June when it launched its shared data plans. But these policy changes are significant.

As my colleague Tom Krazit points out smartphones are fundamentally different devices than tablets. While mobile data connectivity is the smartphone’s primary reason for existing, cellular broadband is a secondary consideration for customers investing in a coffee-table computer. Consumers have shown they’re willing to pay the tablet’s steep price tag, but they’ve shown less willingness to invest in expensive mobile data plans and long-term contracts when Wi-Fi is so readily available.

By eliminating tablet subsidies, AT&T is discarding the $5 a month surcharge on tablets and pretty much normalizes data pricing across individual smartphone and tablet plans. AT&T customers will soon offer customers two choices: sign up for an individual no-contract plan (250 MB/$15, 3 GB/$30, or 5 GB/$50), or for one of its forthcoming shared data plans, which allows customers to add a tablet to pooled data bucket for an additional $10 a month.

But AT&T should go one step further. Now that customers are paying the full costs of their slates, Ma Bell should charge less for tablet data than it does for smartphone data. Here’s why: Subsidies aren’t traditional discounts or sale; they work much more like mortgages. Carriers give you an expensive device at a low up-front cost, but recover the subsidy through premiums factored into your plans over the next two years. If there’s no subsidy then it stands to reason customers shouldn’t pay those higher rates. T-Mobile has already adopted this approach, charging much cheaper data and voice rates to customers who bring their own devices.

I won’t pick on AT&T too much. Ma Bell is actually the most progressive (or least regressive) operator when it comes to tablet data plan pricing. In a recent analysis of U.S. carrier data plans, we found that AT&T had the cheapest per-gigabyte rates for tablets and mobile broadband than any carrier. Even T-Mobile’s new discounted value plans are in some cases more expensive than AT&T’s regular rates. For the same $30 price AT&T charges for 3 GB a month, T-Mobile only gives you 2 GB.

Operators are beginning to realize that tablet subsidies aren’t the way to go. Now they need to eliminate legacy subsidy pricing models. AT&T and Verizon’s shared data will solve the problem in part by allowing customers to draw tablet and smartphone data from a common pool – though they have other problems. But operators really want the tablet revolution to occur over their networks and not over Wi-Fi, they need to make tablet data cheaper.

Approved photo courtesy of Shutterstock user Stuart Miles

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Explaining AT&T and Verizons’ complex shared-data plans

Kevin Fitchard — Thu, 19 Jul 2012 09:00:15 +0000

Confused by how AT&T’s new shared-data plans work? Well, we’ve put together a primer to show you how they work and compare them to Verizon’s similar pricing structure. Ultimately, shared data might not be for you, but hopefully this guide will help clear up the confusion.

Verizon’s plans went into effect last month, and they are mandatory for all new customers. Current subscribers on Verizon’s individual tiered data plans can keep their rates for the time being, but customers grandfathered into Verizon’s old unlimited plans will have a tough choice to make when they upgrade to their next devices: They can either pay full retail cost for the phone or chose between a shared or tiered individual plan.

AT&T’s shared plans will take effect in late August, though it hasn’t revealed an exact date. AT&T’s will be purely optional for new and existing customers.

First, you need to select a data bucket. The following prices are for shared data between any number of devices either directly connected to the carriers network or tethered via Wi-Fi or cable. For instance if you buy a 6 GB bucket, all of your devices will draw from the monthly 6 GB pool. If you go over that allotment both carriers charge $15 for every additional gigabyte.

Now that you’ve got your data, select the number and types of devices you and your family will use. The reason for the different rates for smartphones, modems, tablets and feature phones is due to the fact that both AT&T and Verizon bundle in unlimited SMS and voice with each device. Feature phones make lots of phone calls and send lots of text messages while tablets do not. Why both carriers are discriminating between the all-data connectivity of a modem versus a tablet is beyond me, but they do.

All of these prices are per device so if you have both a tablet and a feature phone, your monthly device connection fee will be $40, the total of the $10 slate fee and the $30 phone fee. If it’s four smartphones, Verizon will charge you $160. As you’ve probably noticed, AT&T’s smartphone fees are variable, depending on the size of the shared data bucket you buy. That brings us to our next chart.

AT&T charges less to connect smartphones if you invest in more data. That may seem like it gives AT&T a big advantage over Verizon, but in most cases Big Red charges lower rates for the data itself. Whether you save money on one carrier versus the other depends on which combination of devices and plan you sign up for.

Take the individual user with a single smartphone that wants to use his phone as a mobile hotspot. A moderate user just looking for basic connectivity could sign up for an AT&T 1 GB plan and pay ~~$95~~ $85 a month, while the same plan on Verizon would cost ~~$100~~ $90. However, if that same single-smartphone customer committed to 4 GBs, the carriers would offer the same price point, $110 a month. And if he bumped up usage to 10 GB a month, Verizon comes out on top charging $140 versus AT&T’s $150.

When you start adding more devices to the plan, the numbers get more complicated. An AT&T plan with four smartphones costs $240 compared to Verizon’s price of $260. But if that same data plan connected two smartphones and two tablets, you’d pay the same rate on both carriers, $200.

It’s not a hard and fast rule, but in general if you’re looking to connect more smartphones, AT&T comes out on top, but if maxing out data usage or connecting a lot of non-smartphone devices is important to you, Verizon’s plans fare better.

Photo courtesy of Flickr user Mark Strozier

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How AT&T learned from Verizon’s shared-data mistakes

Kevin Fitchard — Wed, 18 Jul 2012 16:16:45 +0000

When Verizon Wireless announced its new shared-data plans in June, it should have enjoyed a big advantage over its arch-rival, AT&T. Consumers had been demanding the right to pool data among their families and between devices, and Verizon was the first carrier to deliver. Instead, Verizon fumbled, and AT&T now knows exactly what to do with the ball.

Verizon’s new plans brought on immediate backlash, as it will be forcing all new customers onto the plans regardless of whether they have multiple data devices or not. In addition, those customers have no choice but to pay for unlimited talk and text as part of their monthly plans, which runs counter to consumer trends. Smartphone subscribers are using more data while cutting their usage of traditional voice and SMS. In that sense, Verizon is robbing Peter to pay Paul.

According to Jan Dawson, chief telecoms analyst at Ovum, AT&T had a month to watch Verizon’s missteps and Ma Bell has capitalized on them, even though it’s still offering essentially the same shared-data pricing structure. From Dawson’s commentary note:

“AT&T’s offering has almost identical pricing but some really important differences in the detail. Most importantly, AT&T isn’t forcing customers into the new plans, which is really important because they’re not the best deal for all customers. In addition, AT&T’s overage charges for data are much simpler, at a flat $15 per Gigabyte, compared with Verizon’s confusing two-tier overage charges. There are some subtle differences in the pricing, too, but they won’t make a significant difference to most customers.”

As my colleague Kevin Tofel pointed out some Verizon customers will see a lot of savings by signing up for its new shared plans. But not all customers will. If you’re just one dude with an iPhone, you wind up getting less data and a big unlimited bucket of voice and text for which you may have little use.

AT&T’s pricing plans are very similar to Verizon’s. The rather confusing sliding per-device scale AT&T uses means that each plan comparison must be done on a case-by-case basis. But in general, if you have several smartphones on your plan and are consuming a moderate to large amount of data, AT&T plans wind up being cheaper. If you have relatively few devices (or a bunch of tablets and 4G hotspots) and are consuming more data, then Verizon winds up being the better deal.

The key though is AT&T’s plans are optional, which means the only customers who feel they will see savings will sign up for them. What Verizon did was completely revamp its overall pricing structure, and then gave customers a sharing option. AT&T merely introduced shared data as a new class of service plan that customers can chose from. The difference is critical.

Image source: flickr user B Rosen.

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