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Bring Back that Unlimited Feeling
March 16, 2014
Well, it was bound to happen sooner or later. The days of unlimited data plans have been numbered for awhile, and it was only a matter of time before the economics of maintaining an all-you-can-eat buffet in an environment of almost limitless consumer demand would prove too much for operators.
Tiered pricing structures and the increased complexity of “unlimited” data plans has effectively eliminated the consumer sentiment of all-you-can-eat mobile internet access. While the reality is, there were always natural ceilings on unlimited data – ones imposed by the type of content available and the limitations of early internet-accessible devices – that ceiling is now far higher than operators can afford, due to the popularity of streaming content and cutting-edge devices that encourage high data consumption. Consumers have adapted and quickly become savvy data-savers, reserving data-intensive mobile internet activities for times when they’re connected to wi-fi networks. This type of behavior only serves to restrict growth in mobile internet usage, content consumption, and mobile commerce, just at the moment that they were poised to be major revenue drivers for hundreds of businesses.
But the fact is, it is no longer economically feasible for operators to offer unlimited 3G or 4G data plans, and we all have our beloved iPhone and Android devices to thank. AT&T reported that mobile data consumption increased by a staggering 8000% between 2007 and 2010, coinciding with the release of the iPhone. The new breeds of smartphones are popular among consumers because of the speed of web browsing, downloading, and streaming, but they’re wreaking havoc on network capacity and adding greatly to the costs of maintaining and increasing network infrastructure.
Verizon Wireless has spent billions of dollars to roll out their 4G LTE network, which includes costs to acquire licensing rights to their slice of the 700 Mhz spectrum, telecom equipment, and personnel. Existing network upgrades are no picnic, either. It can take more than 2 years just to get a permit for a new tower in the Bay Area to cope with rapidly increasing demand.
At Aquto, we’re coming up with new, innovative products as a part of our Value Exchange to solve the challenge of making mobile internet access affordable for consumers and profitable for operators. We want to bring back the “unlimited feeling” while ensuring the profitability of mobile internet as a product for operators.
One thing that we’ve been seeing is a readiness on the part of the consumer to integrate Kickbit and the data they earn through MoVE Rewards into their monthly wireless expenditure. Consumer activity peaks at certain times in a billing cycle, suggesting that Kickbit and MoVE Rewards are an active part of their budget planning. And, it occurred to me that operators should be using Aquto’s Value Exchange in the same way.
When thinking about tiered pricing structures, data limits, and caps on high-speed networks, it would likely be useful to consider the additional revenue from, and consumer behavior with respect to Value Exchanges. By leveraging revenue from Value Exchanges, operators can have more flexibility in pricing, offering loyalty rewards and discounts, and offering additional products or services to retain loyal consumers. They should be encouraging the use of Value Exchange programs to offload some of the costs of mobile internet access onto a third party, like what AT&T is doing with Sponsored Data.
Truly unlimited data plans are a thing of the past, but by leveraging Value Exchanges, operators can bring back the unlimited feeling.