Is Your Data Plan Subsidizing Other Smartphone Users?


Smartphone adoption in the U.S. continues to rise. According to a recent comScore (s scor) report, 69.5 million consumers owned a smartphone during the month of February. That works out to 29.7 percent of the 234 million Americans with a mobile device subscription packing a more potent handset. Earlier projections by Nielsen expected half of all consumers to use a smartphone by the end of this year, but the comScore data shows the country about two quarters behind pace to meet that number. Forecasts aside, it’s interesting to see what consumers are actually doing with their connected devices.

The comScore survey, which is composed of more than 30,000 responses, indicates that while more consumers are both joining the smartphone ranks and using the device for more activities, many are paying for the required data plans, but not taking full advantage of them. ComScore’s mobile content usage numbers illustrate the point:

While all the activities showed a gain, and likely will continue to do so over time, I’m perplexed by the low figures for browser use, social networking access, and app downloads in particular. All three activities by definition require some type of connection on the smartphone, yet only one in three or four smartphone owners report taking part in such activities. That connection can certainly be a free Wi-Fi network for many, but that would mean even less reliance on a mobile broadband connection. And in most cases with U.S. smartphones, a mobile broadband data plan is required for a smartphone.

The comScore survey causes me to wonder two things: how many are paying for too large of a data plan, and what happens as consumers engage their smartphones for more activities over time? We know from prior research that a small percentage of smartphone owners account for the most monthly use of wireless data. That information partially justified AT&T’s (s t) move from unlimited data plans to smaller, tiered buckets of data last year, with other carriers looking to follow suit. Based on the comScore device usage figures, it appears a high percentage of smartphone owners can benefit by subscribing to lower-priced, smaller data plans due to a low demand for data.

On the supply side, network operators point out spectrum constraints, and surely for some that fit a high-data consumption profile, the challenge exists. Mobile broadband supply management may be more of a moving target as the heavy data users can sap wireless resources from certain geographic areas while others are heavily underused. Yet, operators are collecting data revenues from all of the areas combined: the low data users from comScore’s survey essentially subsidize infrastructure for the data addicts. Operators and heavy data users essentially benefit from the newer smartphone buyers that are paying for, but not fully utilizing, network resources.

This situation may work financially for now, but what happens when the 38.4 percent of smartphone owners that hit their handheld browser becomes 70 or 80 percent? According to mobile broadband experts at Ericsson (s eric), a network equipment maker, that shouldn’t be a problem because newer data networks are more efficient and wider coverage areas should offset growth in data demand. I’m not sold on that idea just yet, simply because there are so many factors at play here. Aside from location, an ever-changing variable as consumers go mobile in greater numbers, the type of smartphone activity can dictate the need for bandwidth. Email and social network updates can use far less data than video downloads, music streaming and downloading of applications, for example.

As operators confront that question over the next few years in the face of growing smartphone sales through tiered data plans and traffic shaping activities, I’m walking away with questions of my own: Just what are consumers doing with their smartphones, and are they really getting their money’s worth from the required data plans needed for their devices? My guess is that our tech-savvy readership here is taking full advantage of any wireless broadband subscriptions, as I am, but new smartphone owners are subsidizing our mobile habits: a solution that can’t last forever.



The figure that confused me was only 17.5% listening to music. I’m based in Asia and here everyone listens to music on their cellphone.

Why such low music percentages in the US?
In Asia even the lowest cost feature phones (under $40US) have integrated MP3 and MP4 players and OK music sound/capability.


To add to the commend by Donquixote, this also doesn’t have a question directed towards email use.

I know a fair number of users who mainly have a smartphone to read email (not even send). That would be using the data plan.


Please read the data right. Its a % of all mobile subs.
38% of ALL MOBILE SUBSCRIBERS used a browser. You are reading it as 38% of smartphone users. If you read the whole comscore article you will see that for charts which just show smartphone user stats they say “Total Smartphone Subscribers” instead of “Total Mobile Subscribers”.

So in fact if 30% of all subscribers are smartphone users and 38% of all subscribers used a browser then it means 8% of all subs who are using ‘dumb’phones browse the web!

I’m perplexed by the low figures for browser use, social networking access, and app downloads in particular. All three activities by definition require some type of connection on the smartphone, yet only one in three or four smartphone owners report taking part in such activities.

Kevin C. Tofel

Ack, you are absolutely correct: most of the comScore data was about smartphones and I incorrectly glossed over this dataset that applies to all mobile devices. Appreciate you pointing it out to me and I apologize for the inadvertent error.

I’m working with my editors on how to best correct this in the post as much of my premise is sort of shot now. ;)


Most smartphones and apps are being designed like the old gas-guzzler cars, without consideration to the price of data. An explosion of smartphone users will just mean higher data prices which, in turn, might change how people use their smartphones. Streaming videos all the time is cool with an unlimited plan but with data caps people will turn to wifi or just stop such data intensive activities. Tiered plans are the future and with that the carriers should always be able to meet the need because people will pay for what they use.

Kevin C. Tofel

No argument with your thoughts, Stuart, but one question: would you prefer tiered plans or metered, pay-per-use plans? Tiered offers buckets of data with set quantities that you pay for regardless if you use the whole bucket or not. A truly metered plan would charge you for your actual usage, by contrast.


Personally, I’d prefer metered plans, as long as the per/MB cost was reasonable and the meter was transparent, standardized and audited (by the appropriate third party). But I don’t think this will happen. Carriers don’t want to be regulated in this manner and in many cases users would probably pay significantly less for data. I always use less than 300MB/mo and usually its less than 50MB.


Ideally, I would like both a metered option and a tiered option. Similar to how they deal with messaging and voice. I prefer where the device and the plan are separate. Then individuals can get whatever phone they want and use it however they choose.

Lucian Armasu

A metered plan would discourage using your 3G connection, because you’d be very careful about how many MB you’re using every day. You’d try to use Wi-Fi whenever possible, and limit the 3G connection only in emergencies, and even then you’d probably use something like Opera Mini to cut your data costs. This is not something carriers would like.


For the most part I agree with Stuart and Travis. Metering would create a direct relation between how customers used the network and what the pay: users that use little data or none would pay little or none, heavy users would pay the most. It would have the additional advantage for consumers by making the value of carrier plans easier to compare. which is consistent with open market principles.

Speaking of open markets, there would be additional benefits for consumers and carriers.

Instead of resorting to controversially network shaping technologies, carriers could match usage to network capacity by simply adjusting their data unit prices. Also, it would be in the best interest of the carriers to shove as many bytes down are throats as possible if data unit pricing was in effect, making network upgrades more enticing.

Yes, we should get the wireless carries out of the handset business. An “SIM-less” iPhone that could run on any voice and data frequency in the U.S. though software or firmware changes would be a step in the right direction. Frankly, the FCC shouldn’t approve any phone in the U.S. that doesn’t have this capability.

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