We, as smartphone fans and users, are moving into a very unique time in our history. Mobile usage of smartphones (and other mobile devices like laptops and tablets) has increased the demand for mobile wireless broadband to astronomical levels. Mobile carriers are providing this service to consumers, and are seeing profits skyrocket as users are removed from so-called unlimited plans onto more carrier friendly (and profitable) tiered data plans. No longer do consumers need unlimited calling plans – they need bigger and bigger data packages. This shift to mobile consumption of data by users on such a large scale and the incredible price gouging of consumers by voice and data providers is moving us towards a state of what I’d refer to as the “datapocolypse” – where the demand for data is so great and the cost of getting it is so much that (as the saying goes) something’s gotta give.
Recently, Verizon Wireless reported record profits after the removal of their “unlimited” data usage plans in favor of their “share everything” tiered data plans. The comments made by Verizon CEO Lowell McAdam hint at the fact that he believes that his companies “share everything” plans meet their customers needs and represent sound business practices. In actuality, nothing could be further from the truth. The elimination of “unlimited” plans serves one purpose – to further increase the profits of carriers, and no other reason. There are still those Verizon users who were “grandfathered” into their “unlimited” 3G/4G data plans, but the price for this is the loss of any Verizon subsidized phone purchases. How can someone say that more of their customers prefer the tiered data plans when they are being forced onto them from other plans and not being given any other options? Verizon has finally realized that the increase in data consumption via mobile platforms (smartphone, tablets) has grown into the lion’s share of their business.
Smartphone and tablet growth has exploded in the last 5-6 years, spurred first by the launch and popularity of the iPhone, then the iPad, and now pushed even further by the shift toward lower cost Android devices (smartphones and tablets both). This has meant skyrocketing data consumption and carriers have struggled to keep pace. A report from earlier this year talked about how smartphones were the top 3 users of mobile data in 2012. In 2011, it was 2 tablets and 1 smartphone. Another report has analysts speculating that super saturated data networks will slow to a crawl in the next 3 years. If someone wants a high speed provider, carriers like AT&T and Verizon are basically the only game in town.
Lower cost alternatives like Boost, Virgin Mobile, and even T-Mobile currently don’t have LTE (wireless broadband) or are in the early stages, preventing consumers from having real choices in alternatives. In the past, when data speeds couldn’t handle services like mobile web browsing, streaming music and video, this wasn’t as issue. But with the advent of 4G networks and widespread smartphone proliferation, people are able to use their mobile devices in ways heretofore impossible. And it’s so widespread and commonplace, there will soon be a generation of kids who can’t imagine not using their smart device to explore the world around them anytime and anywhere.
With this new need for smart device users to have on-demand high speed data, it’s not unreasonable to assume that eventually consumers will see mobile data as more necessary than voice, and perhaps demand a “consumers data bill of rights.” Something has to enable the breaking of so-called data monopolies by limited wireless carrier competition. There has to be a way that the market can encourage broadband wireless competition, so that users who pay their hard earned money for the service get what they are paying for. Without action, the wireless future could be very bleak indeed – where exorbitant fees are charged by a precious few providers to provide service that doesn’t provide speeds faster than what we had 5 years ago.
Silicon Theory 