Monday, April 04, 2011

Carriers struggle to share mobile data costs with users

Increased use of cellular data over the next five years will pose a serious challenge to operators struggling to convince end users to pay for the growth of next-generation networks, says market watcher Parks Associates. As a result, wireless carriers could see their revenues grow from about $204 billion in 2010 to $500 billion in 2015. But they will only hit that peak if they are able to eke out new revenues from two new sources—charging at least some end users by the amount of data they access and new machine-to-machine applications, said Parks.

"Carriers realize they have to move to pay-per-use to cover the loading on their networks," said Harry Wang, director of mobile and health research at Parks. "We are at early stage of migration to variable pricing," he said. End users will have to get dragged into pay-per-use models. According to a Parks survey, 62 percent of users want fixed price plans for unlimited data, and only four percent support a metered data plan. Some of the biggest increases in mobile data use are in video.

Parks said video use on mobile networks surged more than 90 percent in the last six months of 2010. "Video is definitely going to be the beast to tame on the mobile network," said Wang. So far a small minority of users of new devices such as tablets, e-books and netbooks are using cellular links, but that could change. In a Parks survey, 48 percent of prospective tablet buyers said they would like the tablet to have 3G, up from 28 percent of tablets purchased with 3G in 2010. Parks estimates about 69 million tablets will ship with 3G connectivity in 2015.

From the article title,"Carriers struggle to share mobile data with users" by Rick Merritt

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