Playing the data blame game

Metaratings
08 Oct 2012
00:00
Article

As featured on TM Forum's the Insider blog

Another iPhone has been released and not only did we have to suffer the interminable predictions before it was thrust onto us, we now have to hear the usual raft of complaints about its battery life and increased data usage.

Give me strength! Who in their right mind would expect any device that moves from 3G capability to 4G/LTE and begs to be hyper-connected do anything less?

Joint research by Canada's Mobidia Technology and Informa Telecoms and Media revealed LTE networks and devices are stimulating increased data usage, by up to 50% in some cases. A separate 4G study by mobile intelligence firm, Validas, found the addition of LTE in a phone could double consumers' use.

Surprise, surprise! The smarter, faster, thinner, bigger-screened, app crazy device is just begging to eat more data. But don’t just point the finger at Apple. Just like the evolution of PCs, as soon as memory and disk capacity grew, programmers found a way to eat up every ounce of extra capacity. You can’t blame today’s app developers for doing exactly the same in order to give their own products the edge in a frighteningly competitive market place.

What self-respecting developer of today cares for how much data you use up. The assumption is that there’s plenty more where that came from, and since they are not paying the bills or responsible for delivering the data to customers, why should they care?

Have you ever seen an application come with a ‘Data Usage Rating’? You know, like refrigerators and air-conditioners showing their energy usage rating from one to five stars. How come you don’t get told how much data the application you are buying actually uses? How long before we see ‘green’ apps that use less data and, as a result, less energy? Pigs might fly?

The idea may not be too far-fetched because the message is coming home to roost with data users around the world – someone has to pay for it, especially mobile delivered data. Reports indicate that operators are pricing 4G data on average 20% higher than 3G when they first launch, but there are signs that competitive forces are already starting to pressure 4G tariffs.

ABI Research recently published a report http://www.telecomsemea.net/content/operators-pricing-4g-data-20-higher showing that pricing pressure is already emerging in early-adopter LTE markets such as South Korea. SK Telecom has already effectively cut 4G data prices – for example by including an extra 2GB in its $55 LTE 62 plan – in response to competition from rivals.

Similar 4G mobile data quota and/or pricing revisions are underway in Norway, Hong Kong and the US. The report also shows that CSL in Hong Kong currently offers the world's cheapest LTE data plan, while Singapore's M1 has the cheapest 3G data plan at under $10 for 4GB.

We seem to be going down the same path we did with 2G and 3G. When the market heats up, prices drop and then telcos complain bitterly that data revenues are not supplanting dropping voice revenues. Oh, and what about Voice over LTE (VoLTE), has anyone worked out how to price that, or will just be another giveaway under a data bundle?

And with all of this comes the inevitable warnings of ‘bill shock’. LTE subscribers in Australia are even getting tips from the regulator on how to avoid bill shock:

1. Download apps to regularly monitor your data use and spend.
2. Learn how much your plan charges for each MB of data and excess use.
3. Use Wi-Fi when it's available, especially at home, for big apps and for video.
4. Disable location services, switch email to manual and use mobile websites.
5. Turn off data roaming when you're overseas.

Regardless of the warnings, it will continue to happen, and consumers will blame their network operators, of course. Isn’t it time the whole value chain from device makers and app developers to OTT players and networks sat down and put some basic rules in place, before governments and regulators step in? Otherwise we are bound to see a lot more finger-pointing as everyone tries to divert blame in the data game.

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