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Variable Pricing Coming to Mobile Broadband?

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As people start taking advantage of always-on access to mobile broadband, and new fourth generation cellular networks are deployed, carriers are considering how to protect their data services revenue. They don’t want to make the mistakes made in the broadband wireless world that led to ISPs becoming dumb pipes. They also have to consider how to best use more constrained network resources.

Right now many “unlimited” mobile broadband plans have very real limits (about 5 GB per month in the U.S.). But faster networks encourage more devices (not just mobile phones) to hop on and try to stream videos, share files and generally use network resources, which means carriers need to think about out how to control data usage and keep their profit margins healthy.

Congestion pricing, under which carriers could charge more for different speeds or based on the time of day, appears to be one alternative. Bytemobile commissioned a study on congestion pricing that found that 60 percent of those in the mobile service industry think it’s likely carriers will adopt such a pricing model. Bytemobile sells telecommunications equipment that would enable such pricing, but others in the communications industry have offered congestion pricing as a possible way to manage the network and keep margins in line.


21 Responses to “Variable Pricing Coming to Mobile Broadband?”

  1. As it stands today, Clear/Sprint is the only provider that is offering truly unlimited mobile broadband plans. They’re also the only nationwide deployment of 4th-gen technology (wimax).

    As more providers bring their new network online later this year, we’ll see how the pricing model pans out. Let’s hope it’s back to unlimited!

  2. Personally as a user would rather pay a fixed fee without having to think about how much I am paying depending on the time of day. I think people just want a consistent speed and the one they were told they would get.

  3. The first commenter said it: affordable data plans. I have a family plan with five phones. I can’t begin to afford ATT’s unlimited plan, even at the group rate, so we get by with SMS and Multimedia.

    ATT could sell 5 data phones and have 5 satisfied customers, right now today, if they had affordable data. As it is, I’m running the contract out and switching to Verizon. Why deal with #2 when there’s no advantage…and their 3G service ain’t that great either.

  4. Robert A. Rosenberg

    Backhaul is from the Tower to the company’s network. Even if the connection is between two users on your network (not a user and another who is on the Internet) you still need the backhaul from the Tower to get on your network (think of it as going down your driveway to get to the street). Thus P2P between users on your network still needs to use the backhaul. What it bypasses is the usage of the connection between you and the peering point needed to connect to the Internet.

  5. two major issues with wireless broadband right now are not enough backhaul to the greater internet and download usage that well exceed uploads. therefore it would make great sense for the operators to offer super low prices for applications on there network that are strictly peer2peer between two device on their networks. for example video calling or file transfer between two of their customers could be priced lower than regular web surfing or email that use lots of backhaul to the greater internet and is lopsided with downlinks far exceeding uplinks.

  6. “They don’t want to make the mistakes made in the broadband wireless world that led to ISPs becoming dumb pipes.”

    Did you mean to say: They don’t want to make the mistakes made in the WIRED broadband world that led to ISPs becoming dumb pipes.

  7. The carriers may not have the means to implement this since the Federal Trade Commission is no longer in their pocket. In fact they will be finding themselves staring down the barrel of a newly resurrected Net Neutrality Bill in 2010 – which *WILL* make them a dumb pipe.

    Class action lawsuit by everyone that owns a mobile phone, aimed at the false advertising of “unlimited” first.

  8. if they limit speeds a bit as the way to control total bandwidth but offer unlimited service they could make a lot more money by having low prices and lots of customers. even if they only offered speeds of 500 kbps but offered cheap and unlimited i bet they would see ton of new subscribers. that is about the speed of the crikit broadband network which is seeing spectacular growth. among certain groups of people in the areas they serve they are becoming the most popular ISP. and even though they do have a discretionary 5GB cap(after which they can slow down your service) in my experience it does not slow down that much after that; and they never charge overages or cut you off all together. although i have a wired internet connection as well most crikit users do not; it is their sole internet access method.

    once they get everyone hooked on cellular data service they could see what can be done to improve speeds; but they need to get the people converted first.