Smart Phone Data

November 21, 2010

At this point I am sure that you have heard about cell phone companies trying to limit data use (at least in the US).  Sure I’m not a huge fan of this move but I understand why the change is underway. Some providers (like T-Mobile) still offer unlimited plans.  However, to limit use even for these user T-Mobile supposedly reduces transfer rates once you exceed 5GB of data use.  This shouldn’t bother too many people since getting close to that limit is very hard.

When I read that last bit of info about T-Mobile it got me to thinking, why not charge for speed and not amount? The strain on the networks is coming from the large bandwidth demand which is slightly related to the amount of data a person uses.  If instead of partitioning individuals based on amount of data used, instead do so based on how much they are willing to pay for speed.  Cable and DSL providers have been doing this and it seems to be working just fine.  Furthermore, with capped speeds you in some ways have also set a theoretical limit on data usage. Plus I don’t think you’ll lose money if you use a reasonable pricing model. Most of the high data users will want the faster/fastest speeds, as it will be the only way they can continue  doing what they have been doing.  The real bonus is that some more moderate users will be willing to pay for higher speeds resulting in a gain for the company.  This won’t put anymore strain on a network since as things are, everyone is getting “premium” speed.  So why not cut some “dead weight”?

This post was typed on my Nexus One so please excuse any spelling errors. I have tried my best to eliminate as many as possibe.

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