Monday, September 22, 2008

Everybody Loves Data! And Carriers Love Money

Back in "the olden days," cell phones were used as phones (and a 5 minute call to Mom cost about 20 bucks) and people accessed the internet by plugging a phone cord into a modem and waiting through an hour of busy signals so that we could wait 10 minutes for a website to load (and a ridiculous hourly fee to AOL for the privilege).

Times have changed! These days, just about every cell phone is capable of email and/or web browsing of some sort and the use of wireless broadband service is becoming more and more popular all the time (just ask all of us who work at 3G Store!). According to a study, from June of 2007 to June 2008 the number of Americans who had access to social networking sites via a mobile phone rose 93%. The same study reported that about 58% more people sent photos with a phone than in the year before, and the number of Americans with an unlimited data plan rose 58%. With everything mobile data service can do for us (email everywhere! Better yet, Facebook everywhere!) and the uber-popularity of devices like Blackberries and the iPhone, it's no surprise that more people are signing up with data service.

The problem, though, is the COST! Over the past couple years both Verizon and Sprint lowered their EVDO monthly rates, but other than that the cost of data has risen - a lot. Despite the fact that providing data service is actually cheaper now than it was a few years ago, text messages can cost up to 20 cents, and unlimited data plans for PDAs can be up to $30/month in addition to your voice plan. What's worse, we're paying more for LIMITED data access, as evidenced by all those nasty 5GB caps, and all those fancy applications we like to use on our phones eat up a lot of bandwidth (interesting related sidenote: T-Mobile has reportedly begun offering incentives for developers whose apps use less than 15mb).

There's another problem, too: can carriers handle the demand for data? Plenty of people have experienced dropped calls and signals or slower service when demand is extra high, and if networks want to stay competitive in a market that looooves their data service, the networks are going to have to invest more money in expanding their services and stabilizing customers. If a network can't keep up with their competitors and people are experiencing slowdowns and dropped calls, there's no doubt that people will start abandoning that ship to go with companies that are more focused on expansion and improvement.

It's clear that rising costs and even bandwidth limits aren't going to slow down the wireless data trend and that even if the cost of providing the service goes down for networks they don't seem to have much interest in passing those savings on to us consumers. If prices DO go down, it's going to be due to increased competition in the industry. Until then... be careful with those overage charges on your texts.