Why Unlimited Mobile Voice Means Higher ARPU For Carriers
If you haven’t been following the various tech blogs over the past 24 hours or so, you’ve missed out on the announcements about Verizon, AT&T, and T-Mobile all offering “unlimited voice calling” for $100 a month. T-Mobile, with it’s decidedly weaker network, upped the ante by including text and MMS messages in that price. Data in all cases is extra. (Sprint announced an all-you-can-eat plan a while ago for $120, but it includes SMS and data)
While this sounds like a good deal, consider the rate plan you’re on now. Is your rate plan less than $100 a month? Are you using all the minutes you’re paying for?
Granted, there will be a class of users where this rate plan will make sense–the road warriors who basically live on their mobile phones. However, I suspect that’s a minority of users. I also suspect that generally speaking, there is enough margin in $100 a month to cover the vast majority of these high-usage users.
Where I suspect the increased average revenue per unit (ARPU) will come from is those people with sub $100 plans who either ditch their landline or simply upgrade to this new unlimited plan to normalize their wireless costs. The reason you subscribe to an unlimited plan is exactly that–cost normalization. You know what your service is going to cost each month and you don’t have to worry about how much you use it.
One thing is for sure with these unlimited plans: extra lines won’t be $10 a month like they are now. Extra lines will be more expensive, which will also increase ARPU. I suspect as the price war continues, this, along with the base price, will drop.
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Tags: at&t, sprint, t-mobile, unlimited calling, verizon wireless Fnord
Comment by spg
i want see what happens to the other rate plans. will we start getting less for $80 than we did before in order to get us to upgrade. in the long run(i say by the end of the year) everyone will be around the crickit/metroPCS rates. about $40 unlimited voice/$60 unlimited everything.
the other story we are not hearing much about is that at least the verizon plan takes internet use restrictions to a whole new level. there is no ‘data’ option available. what there is are options for sms, mms, vcast(package of services), email, and html browsing or all of the above. but the all of the abover is that and only that. they are making a big deal about removing the 5G data cap but it this is worse since you really can’t hit 5G(with the exception of using verizon branded vcast services) without doing something beyond these included activities.
who is going to give us that ‘FAT DUMB PIPE’ that we need? as it has been it gets worse every year going in the opposite direction.
spg
Comment by Sheryl Breuker
Hi, I have a couple of thoughts.
First, if $100 dollars a month equates to a higher fee than paid currently by consumers, even though it would essentially deliver unlimited usage, they certainly do NOT have to pay for that plan. Can’t consumers continue to pay and get what they already have? Nowhere have I read that this will make obsolete the current available options. That said, if we as consumers aren’t smart enough to check our sage totals and opt for the unlimited plan for in case, too bad if we get egg on our face. I’m about being a proactive ‘pro’sumer. I think we owe ourselves the due diligence required to get our best price. If we fail ourselves we only have ourselves to blame.
Great post!!!
Comment by Marc
Ditto on the MetroPCS comment. I’m still waiting for Unlimited Data Plans to become available to Prepay/Pay-as-you-go customers in the U.S. (like the rest of the world has) as well as Unlimited Data Only plans (other than on Blackberry hardware), and a 3G iPhone with tethering option….but I digress.
Comment by PhoneBoy
@Marc: damn straight: I really want to see data-only on prepay.
Comment by PhoneBoy
@sheryl If people were smart enough to check their usage, many of them would be on prepaid and not get suckered into the two year ball and chain deal with a free phone.
Comment by PhoneBoy
@spg I think that we’ll see the fat, dumb pipe be a differentiator. I don’t think Verizon is going to be the one that provides it, given how they’ve tried to make the pipe “smart.”