The joys of following cell phone rate trends!
In the past two weeks, all of the major carriers decided on some form of the all-you-can-eat plan, which commoditizes cellular usage to some extent. This decision goes one step further in the wireless sector's inevitable march to being another set of dumb pipes just like cable and landline telecom. The cable providers will fight this, since it's hard to make money when you can't justify value-added services. But at the same time, it's really hard to be both an infrastructure provider and a content provider at the same time. (This is why great content creators like Electronic Arts aren't in charge of the Internets.) So, how good are each of the plans that came out this week? Let's take a look at each one.
Verizon: Offers unlimited voice at $100. Honestly, not a very exciting value option. Most users who use a ton of minutes end up being sales people. In a corporate environment, you can usually drive down voice usage to about $50-$60 per person even with relatively primitive telecom expense practices. You can also get unlimited text message for an extra $20, which is useful in theory, but in a country where the CTIA says that we're only texting, on average, four times a day, that's only 120 text messages per month. You can get limited text message packages that probably provide better value. And they offer unlimited data for an extra $20, but that isn't valid if you have a Treo or Blackberry that would actually use significant amounts of data. On the whole, this isn't an offer that is going to change Verizon's bottom line all that much and isn't going to help the enterprise end user if Verizon prohibits these users from joining into enterprise share plans. To top it off, Verizon changed their data plan structure so that there is no unlimited data for smartphones. Instead, there is a $40 plan for 50 MB and a $60 plan for 5 GB
AT&T quickly struck back with its own unlimited plan which also offered unlimited voice calls for $100. However, they also offered an unlimited data plan for $20 for the iPhone, $30 for other phones with personal email, and $45 for phones with business email. On the whole, it's still a bit pricey, but the data side is actually quite competitive. It's an OK deal, but probably not worth switching to if you've got an enterprise account.
T-Mobile quickly followed suit with its own $100 unlimited voice calling plan which also includes text, MMS, and instant messaging. It's definitely a better deal than Verizon or AT&T and T-Mobile already had its own unlimited data plan. T-Mobile's heritage with Deutsche Telekom has shown in its ability to understand what cell phone users look for. It's definitely a big strategic advantage that they have even if they lack the sheer assets and resources of Verizon and AT&T.
Which brings us to Sprint. The only reason the other three companies rushed to do this so quickly is because there were already rumors that Sprint would do something to undercut everyone, but nobody knew what it was. Some guessed that Sprint would offer unlimited voice calls for $60 per month. Others guessed an unlimited package that would slightly undercut T-Mobile. Instead, they offered the whole enchilada for $100: voice, data, messaging, everything. (Although there are rumors that they're having trouble with supporting Blackberries.) At this price, you might actually save money from a corporate perspective by going with a package like that.
Also, this plays up to Sprint's greatest strength as a wireless carrier, their strong data offerings. Unfortunately, it doesn't fix Sprint's weaknesses, especially regarding the perception of their customer service. So, they're not out of the woods by any stretch. But this is another good pricing decision by Dan Hesse, who also pioneered the concept of monthly billing for ISPs when he was at WorldNet and then combined roaming and long distance charges into OneRate when he was running AT&T Wireless. This guy knows how to price competitively. The question is whether this is enough to fight back the spiral that Sprint has been in or whether Dan has some more rabbits up his sleeve, such as the rumored WiMax phones that have been promised by the end of the year.
But back to the actual unlimited plans. All four of these decisions show at least one trend: the carriers are ready to give up on voice as a value-added service and will treat it as a commoditized service. Messaging and data are on their way there as well. So, will this simplify wireless billing to the point where wireless expense management isn't necessary? Well, the next bugaboos in wireless billing are in dealing with licensing, software prices, maintenance and insurance, unit acquisition and replacement, and convergence issues, all of which are changing and all of which provide some level of value to the wireless unit. So, wireless expense management is still a good idea, but you should be careful that your solution is up to the challenge of dealing with the present and future of wireless technology.
