Is Your Data Plan Subsidizing Other Smartphone Users?

mobile browser

Smartphone adoption in the U.S. continues to rise. According to a recent comScore 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 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, 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.

You're subscribed! If you like, you can update your settings


Comments have been disabled for this post