Yesterday AT&T announced unlimited free mobile to mobile calls within the US for their customers, a move they most likely felt forced to make in order to stop customers defecting to the iPhone that is only now available on Verizon’s network. As GigaOM point out this is a clear pointer to where the world is headed – voice will be worthless, and all the value will be in data.
Here are some of the reasons:
- Skype and other VOIP services have already made voice and data fungible
- Voice ARPUs have been declining for some time already (see the chart below)
- Data consumption is growing fast
- Servicing the needs of data hungry smartphone users is where the money will be going forward
The flipside of this development is that for operators to continue to make money they will need to make more from data and unlimited data plans will become a thing of the past. AT&T ended its unlimited data plans last June.
Looking at the history of mobile data for a minute we see that operators have performed the drug dealers trick on us. They got us hooked on data by (almost) giving it away with unlimited plans and now that we can’t/won’t give it up they are going to start charging, and I imagine charging handsomely for heavy use. At the end of the day this is only reasonable, carriers need to make money and they need to shift their charging plans to roll with market developments. In my iPhone I have a pay-as-you-go SIM from Orange that bundles almost unlimited data with limited voice minutes, but because I use my Blackberry to make calls I never have to top up and I get the data almost for free – a situation that clearly isn’t sustainable for the long run. For a while now I’ve been waiting for Orange to change the T’s and C’s so that I pay more, reflecting the value I get out of their data network.
Putting it another way, wireless bandwidth is a scarce resource and charging should reflect usage, and as the balance of use shifts from voice to data then the basis of charging should switch from voice to data.
I realise that this might cause some people to cut their data usage and thereby slow the development of the mobile web, but mobile operators need to make money too. Otherwise there can be no mobile web.