A few tiered data promotions that wireless providers should seriously consider

Taylor Martin
 from  Concord, NC
| April 22, 2012

Once mobile users started showing more and more interest in smartphones, which often require accompanying data plans, wireless providers realized just what a cash cow mobile data would be. Now that nearly half of all U.S. mobile subscribers have smartphones, carriers have focused efforts on building new, data-centric wireless networks (i.e.: LTE) and better monetized their data pricing.

Goodbye, unlimited. Hello, tiered data.

Many of us – myself most certainly included – took the all-too-common unlimited data plans for granted. Just two years ago, my monthly data usage was likely no more than 1GB or 2GB per month, and I never thought twice about it. I could have used much more without any repercussions, streamed movies and music until my heart was content. Now that I have (unwillingly) bought into a tiered data plan, however, every bit counts. I constantly keep a mental tally of exactly how much data I use and savor every single bit that I push or pull through the airwaves. A single 45-minute TV show streamed through Netflix in HD over my mobile data connection can easily eat through one-tenth of my entire monthly allowance.

In other words, watching Netflix through a tiered data could easily be considered splurging – something you would only want to do once every so often, else you risk an abundance of overage fees.

It doesn't take a rocket scientist to understand the "need" for tiered data plans and monthly caps on subscriber usage. Carriers throw around the term "bandwidth crisis" like it's going out of style. Their 3G networks were constrained and they were in a scramble to alleviate some of the stress. Not to mention, they were on the brink of launching faster and much more expensive 4G networks and weren't about to allow users to freely roam on them.

But anyone who digs through the numbers and has a little common sense can see that things aren't exactly as bleak as the picture they have painted. And, as we learned not long ago, tiered data and throttling of unlimited plans have had little affect on how wireless users consume their data. Thus, AT&T's and Verizon's new monetization models for data have come into question quite frequently.

Frankly, I have never welcomed the idea of limited data usage. (Who has?) There are definitely benefits of tiered data, such as: more money in the carriers' pockets, the ability for said carriers to more quickly build out new networks and offer a higher quality service. But after several years with comparatively cheap, unlimited data plans, the introduction of a tiered structure is not only regression to an archaic monetization scale, it's a poor way of running a business. (Imagine if your home ISP did the same thing. How many of you would report them to the Better Business Bureau?)

That said, the chances of carriers backtracking, admitting tiered plans and throttling have had little effect and re-introducing heart-warming unlimited plans are next to none. That would mean less money for them – no more fees from repeat overage offenders. But there are several alternative methods to current tiered plans where both the carrier and consumer win.


Rollover data

As I've said before in the past, much like the rollover minutes that AT&T offers for voice calling, there could also be rollover data. Currently, if you do not use all of your 2GB, 3GB, 5GB or 10GB data plan on AT&T or Verizon (not all of those tiers are available from both carriers), your leftover bytes are gone, lost forever. You pay for them each month, but if you do not use them all, they simply disappear.

What would be so difficult about rolling those unused bits over to the next month? Obviously, there would need to be a cut-off at some point. Rolling over 1,000GB (1TB) obviously wouldn't benefit anyone -- a person who has that many rolled over bytes would probably never use them all. But having them wouldn't hurt anyone either.


Voluntary throttling and overage options

Unlike AT&T and Verizon, who charge a $10 per gigabyte overage fee with their larger data plans, T-Mobile simply throttles its data users who reach their monthly cap. For example, if I have a 2GB data plan and a phone capable of accessing T-Mobile's HSPA+ network, once I hit 2GB, my data still works, but it is slowed to EDGE speeds. I can continue to use my phone as before. Everything just works noticeably slower.

While it isn't likely AT&T or Verizon will adopt this over their much more profitable model with overage fees, it would be nice to be able to opt to be throttled instead of possibly paying two, three or more $10 overage charges. For instance, I have a 5GB plan with AT&T. If I use one byte over 5GB in a month, I am automatically charged $10 and given an additional gigabyte to use. Just as easily, Verizon and AT&T could monetize a throttling option. Once I reach 5GB, instead of immediately being charged $10 for 1GB more, I could choose between the additional gigabyte of 3G/4G data, or I could also opt for unlimited EDGE data for a smaller fee ($5).

Likewise, this could be utilized before a user reaches their cap. Instead of using EDGE after reaching the cap, users could opt to use unlimited EDGE data throughout the billing period while saving their faster, limited, 3G and 4G data as needed. For email and most of my usage like Google Talk, Twitter and Facebook, EDGE speeds are tolerable. But I would choose to use 4G for Web browsing, YouTube, etc. This would be my promotion of choice.


Unlimited data in off-peak hours

With several providers, if a wireless customer makes voice calls after a certain time (in off-peak hours, often after 9 PM and before 6 AM), those minutes go unbilled and do not count towards your minute allowance. Back when I used my cell phone primarily for voice calls, I would stick to making most of my long calls after 9 PM.

The same concept could apply to data considering the entire reason for tiered and throttled data is to relieve some of the stress during peak hours. That said, data is a different beast and users could easily shift "off-peak hours" to current "peak hour" times if data in off-peak hours went unbilled.

It's worth noting that there should be a promotion similar to this coming in the near future from Verizon, called drip-casting. Drip-casting would benefit users who don't mind sacrificing the spontaneity of on demand mobile data for planned and unbilled data usage.


Specific apps and services that go unbilled

With mobile data, there are some services and applications that use significantly more data than others. Netflix, as I explained above, can chew through data faster than just about anything. YouTube is quite the data-hungry app as well. But there are others that don't use nearly as much data.

Instant messaging, for instance, uses very little data. Nearly every day, I use Google Talk all day long. Between April 15 and today, Talk has only used 2.71MB. In contrast, Web browsing has used 112MB, Play Store has used 100MB and YouTube has used 74.21MB. The time I have spent using the applications, however, differs greatly. Google Talk is easily my most frequented application. Yet the Play Store is probably on the other end of the spectrum – I only visit it only for updates, maybe once per week. However, downloads from the Play Store are usually large downloads while 99 percent of the exchanges through Google Talk can be measured in kilobytes.

Applications like Google Talk are low-bandwidth and hardly count towards your monthly data allowance. While they're not going to help much with your YouTube video obsession, they could make a difference once the bill comes – shaving a few megabytes here and there. There was something similar mentioned to this in the explanation of drip-casting, where Verizon would create partnerships with certain applications or service providers and "not count" data consumed while using those specific applications.


While some of these are only machinations of my wandering mind or simply wishful thinking, what perks would you like to see for tiered data plans, ladies and gents? Is rollover data the most appealing to you? Or would drip-casting and unlimited data in off-peak hours be more significant for you? Sound off in the comments below and share any promotions you would like to see applied to your tiered data plan!