How mobile data plans should be set up

How mobile data plans should be set up

Summary: Why current data plans suck, and how I'd fix them.


Carriers continue to insist on dishing out bandwidth with an eye dropper and charging the earth for it.

Almost everyone who owns a smartphone or tablet is tied to some kind of data plan, and no matter how good the device is, it's likely that the data plan it uses to connect with the world sucks whole lemons. Carriers continue to insist on dishing out bandwidth with an eye dropper and charging the earth for it.

AT&T has just revamped it's data plans, and it's not really pretty. Currently you get 200MB for $15, 2GB for $25, or 4GB with tethering for $45 while under the new plan you'll get 300MB for $20, 3GB for $30, or 5GB with tethering for $50.

Sorry, but this sucks. Here's just a few things wrong with this scheme.

  • First, 300MB for $20 ... seriously? That works out at a whopping $66 for 1GB. That's insane, especially when you consider that at the next stop you're only paying $10 for 1GB.
  • We make the jump from 300MB for $20 to 3GB for $30. That's an insane jump.
  • Tethering only available with the top rate plan.

OK, here's what I know about how people use data plans. Most people seem to use somewhere between 500MB and 1GB of data monthly, with very few people (less than 5% or thereabout based on what carriers say) going over 2GB. The carriers know this, which is why AT&T is offering a ridiculously small starting point and them jumping to beyond what most people ever use. It's basically pay $20 for something that doesn't fulfill your needs, or $30 for something that you're never going to manage to use fully.

Then what's this tethering nonsense? Seriously, I don't see why tethering is considered a premium product on capped data plans. I understand that people might use more data, but on a capped plan the carriers win if that happens. The only time I see the need to charge a premium for data plans is when the plan is unlimited (and I mean truly unlimited, not limited to some silly 'fair use' policy), then charging extra for the option is justified.

Here's the sort of data plan I'd come up with:

  • Up to 750MB for $15, this would cover those with low data usage
  • Up to 2GB for $25
  • Up to 5GB for $40
  • Unlimited for $50, but with a $5 per month tethering fee
  • Tethering on all plans
  • Going over the data allowance bumps to the next plan

What do you think? fairer?

Image creditmechnine

Topics: Mobility, Hardware, Laptops, Smartphones, Tablets

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  • RE: How mobile data plans should work

    Much! Read the small print on 'unlimited' these days, not so 'unlimited'. I've been 'tethering' forever....charge extra....HA!
  • RE: How mobile data plans should work

    So here's the deal. You're in charge of pricing for everything at AT&T Wireless. You are given a capital budget of $xxx. And are told you need to generate revenues and profits of $yyy and $zzz or nearby given various parameters.

    Where do you NOW cut prices and raise others to maintain stated goals. And remember if you don't meet the goals the company will be sold with you being out of work.
  • Luckily for us you don't run a business

    I'm sorry but wireless carriers are a business and they are pricing their product (wireless access) to meet the demand based on the bandwidth they have.

    I'd love to see cheaper rates and you would think as more people pay for this type of access the rates should go down, but the networks can only provide so much bandwidth and that costs $$$$. Millions upon millions have been spent buying spectrum and building out back haul etc. The larger the network becomes the more people you need to manage and keep it running.

    The days of unlimited broadband / wireless are done. Blame video streaming for that.
    • RE: How mobile data plans should work

      @MobileAdmin while the numbers may not add up, the philosophy is sound. Add your own numbers if you think the carriers need to make more money to sustain their business. It's the "charge through the nose for a phantom capability" that irks me, like an additional charge for tethering.
  • :)

    Where can I sign up for your data plans?! :)
  • RE: How mobile data plans should work

    Mobile data has become too expensive. I have had 3 generations of smartphones tethering to my laptop (without the fee). I dropped down to a feature phone last year. It was an adjustment, but the carriers will only change if they start losing customers and they lost me. What???s the point of massive 4G bandwidth with data caps? All it means is that you reach the cap all that much faster.
    • Agree with you


      I put the blame mostly on the easily led "buy now pay later" consumers who just cannot resist the shiny new "subsidized" toys. Most of the bloggers here are part of that charade.
    • RE: How mobile data plans should work

      @hkindle You should go with T-mobile there plans are pretty good. I pay $10 for 200mb data plan. I did have Verizon prior to T-mobile but was not using much of the data plan. I agree with you if data plans and carriers get even more out of hand i am willing to end my smartphone future as well.
  • RE: How mobile data plans should work

    How about carriers stop charging us separately for data, text and voice. They are all 1's and 0's in the air now no matter how they are used. So essentially all smart phone services are data. Data is data is data. So we shouldn't be charged separately.
  • RE: How mobile data plans should work

    Fairer for the consumer, yes. Fairer for the provider, no. They've got to pay for the fast rollout of the networks. Once they get that network out, then they can look at maintenance mode and perhaps compete on price. Right now they are competing on features of their data networks.
  • RE: How mobile data plans should work

    I think we should say to hell with it all and just make the internet access free for everyone. Online-all the time- for free. It should be paid for like how Canada does health care.. What do you think?
  • RE: How mobile data plans should work

    actually...MOST people use less than that 300 MB plan. That is why they offer it. IT is called having aa life. one (except maybe you) will EVER say on their deathbed "I wish I had spent MORe time online while I was alive rather than knowing the touch of a beautiful woman."
  • RE: How mobile data plans should work

    and so you just get to make up all your own prices and nott care how that effects the profits for hte shareholders..all because YOU are wasting your pathetic life on the internet 24/7?

    and by the way...none of this is 'fairer" to the people who HAVE alife and see the network congested by people like you without a life
  • RE: How mobile data plans should work

    Wow I didn't realize how lucky I was to have Sprint. Not that their plans are cheap or anything, but I do get truly unlimited 4g (where it's available, and I live in a big city, so it is.), although I do have to pay extra for using my smartphone as a hotspot (but it seems everyone pays extra for this privilege). I'm not saying Sprint is the greatest or anything, they definitely have a few issues, but damn, I didn't realize how much everyone else was getting gouged.
  • Pay per GB

    ~$5 for the connection + ~$5/GB or part thereof. The carriers should adopt a system like this which gives them guaranteed profit for every GB every client uses. Tethering wouldn't matter. Heavy use wouldn't matter. In fact, the carriers would _promote_ heavier use. As smartphones become ubiquitous and customers use more on average, carriers make more, not less.

    Never happen.
  • RE: How mobile data plans should work

    Come on folks. What happened to paying for just what you use. A set plan of any kind means, more than likely you are paying for service you don't need. Electirc usage is metered and you pay so much for each kWh. As a responsible adult, I would rather see a system whereby I manage my useage based on what I need and can afford. Then the phone companies can manage the bandwidth by supply and demand.
  • RE: How mobile data plans should work

    What happened to a data bucket for families?
    • RE: How mobile data plans should work

      Verizon is supposed to offer them sometime this year. Personally I can't see the point, since the misperception is that "sharing" wil save consumers money. It won't. VZW will make sure those plans don't impact ARPU or the bottom line to any significant degree. Last time I looked at a proposed model for these plans, it was something like minimum $70/mo data plan with a $10 or $15 (undecided) monthly charge for each add'l line on the plan past the first one. Who knows how that's evovlved or what it will finally be when VZW throws it out. And people will flock to it like lemmings.
  • In the UK

    prices per Mb are even higher but we have one community owned provider callled giff gaff that leases network from 02, reduces costs by offering only email and community support BUT which enables it to offer unlimited data (no tethering) free texts and 250 minutes of talk time for just £10 a month including 20% vat (sales tax) that's around $14.6. Also it is contract free and you can use it as a pay any time you dont want unlimited data. You can leave anytime you like. Of course at these prices it is sim only but that leaves you free to buy your phone, new or second hand, anywhere you want. You could add something like a £200 second hand galaxy S2 and you have a much better deal
    • in 5th line should have read "pay and go"

      Why oh why cant we have an edit button in these forums!!