Are the days of unlimited wireless data plans numbered? ReadWriteWeb reports on a speech by a wireless researcher who believes that they are.
Dr. Reinaldo Valenzuela, director of wirelss research at Alcatel-Lucent Bell Labs, notes that the more people use smartphones, the more data usage is going to go up. Only 10% of all smartphone users are using the majority of data, and as that usage grows, soon the cost of providing “unlimited” bandwidth data plans will surpass the revenue it brings in.
Valenzuela believes that metered pricing is one possible answer, but there are also others. In a note to ReadWriteWeb after the article’s initial publication, he writes:
I intended to convey that usage based pricing is one answer. There are many others, like moving away from focusing on higher rate applications and usage based pricing and moving onto content based and new service revenue generation that is not directly tied up with high rate usage.
The article focuses on smartphones, which have access to bandwidth-intensive multimedia applications, such as streaming video and—with the launch of the 4th-generation iPhones and iPods Touch—video calling. There isn’t any mention of the less-bandwidth-intensive but still theoretically unlimited-bandwidth e-book readers such as the Kindle and Nook.
Of course, e-ink readers can’t do the sort of multimedia available to smartphones and tablets (it is undoubtedly no accident that the NookColor only includes WiFi, not 3G, connectivity), but this is going to change over the next few years as better display technologies such as electrowetting mature. And this could lead to some difficult decisions on the part of Amazon and Barnes & Noble, as they may well have to impose new limitations onto their e-book devices’ use of 3G—limitations that could confuse and annoy the consumers that the unlimited 3G previously wooed.
But perhaps by then WiMax and other next-generation wireless technologies will have matured and will be able to offer bandwidth more affordably. Regardless, this is one more element of uncertainty added to the mix. We’ll just have to wait and see how it all shakes out.
I don’t know if I’d categorize NOOK as “theoretically unlimited bandwidth”. B&N keeps a pretty tight rein on NOOK 3G usage. NOOK’s 3G can only be used for shopping for e-books on B&N and for downloading those e-books, and even there B&N puts a limit of 10MB on each downloaded e-book. Larger e-books must be downloaded via Wi-Fi.
Software updates must be downloaded via Wi-Fi. Web surfing is only available on Wi-Fi.
Oh wait, I think the new “current page number” synchronization feature can also use 3G, but that’s just a few bytes of data.
This discussion is as old as Internet is available over GSM. “A few users abuse it. We have no other choice, we have to raise the price!”
Most data plans here in Europe are already cropped, download speed for cell phones is limited after a certain amount of MB. Guess what, it’s still enough for the users.
I just see in all these speeches the excuse to rise the prices, but it won’t work. You always have one provider which sees, that they are still making money, and the rest of them are following after a certain time so they won’t lose the customers.