Predictability Is the Key to Successful Wireless Data Pricing

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Unlimited data plans are quickly becoming a thing of the past for both fixed and mobile operators. Over the past year we've seen Tier 1 operators such as AT&T (NYS: T) Mobility and Verizon (NYS: VZ) Wireless debut tiered-data price plans for smartphones and many smaller operators are following suit.  Even though some operators such as Sprint Nextel (NYS: S) and Clearwire (NAS: CLWR) still offer unlimited data plans, most experts believe that those types of data packages are just too expensive to provide because operators need to balance the economics of their physical infrastructure with the prices they charge their customers. And data usage is just increasing too quickly for them to be able to make the unlimited price plans economically feasible and technically possible.

But there seems to be a lingering disconnect between the customer and the operator in terms of what usage-based pricing plans are offering. Most consumers don't understand how much data they are using or purchasing, so measurements like megabytes and gigabytes mean little to them.

And even though most operators have implemented alerts to notify customers when they have used certain amounts of their monthly data plans, those communications are insufficient because they aren't speaking to consumers in a language that they understand.

So what's the answer to this dilemma? Billing and policy control experts say that operators need to start implementing pricing plans that are tied to certain applications or activities. For example, offering a pricing plan that will allow customers to stream a certain amount of movies or video clips. 

Many customers are also interested in a shared data plan that will let them connect multiple devices such as a tablet, smartphone or laptop and use the same data plan. Several operators outside the U.S. are already experimenting with multi-device plans, and analysts expect U.S. operators to soon try this strategy.

Ultimately, the key to success in mobile data pricing trends is predictability. Customers don't want to be surprised when they get their bill at the end of the month.

In our latest ebook, "Do Usage-based Pricing Models Work?" FierceWireless delves into the various ways policy control tools can help operators implement different pricing options. We will also look at what experts believe will be the next stage in broadband pricing strategies. Check out our in-depth report here.

This article originally published here. Get your wireless industry briefing here.

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