Talk of tiered data pricing has been a hot topic as of late. It's expensive and people want more for less. What's new?
Earlier this month, I touched on a few different topics around data pricing and some possible options that carriers could offer in 2012 to customers to make paying for data a little easier on everyone.
A week and a half ago, a Verizon executive explained drip-casting, which should come into effect later this year, and would allow users to plan to download a large file (movies, for instance) ahead of time and keep said file from counting toward their monthly allowance. I went on to explain that in addition to drip-casting, providers could tag similar promotions that have been used on calling plans to data plans, like unlimited nights and weekends (or off-peak hours), rollover bytes and even promotions with companies like Netflix or YouTube that keep the data that is consumed through their services off of your tally. I also said that I would be more than happy to pay for more data (for more bits total, not more per byte) if voice and text messaging plans were priced more appropriately to the times.
Something I didn't touch on, however, as many readers pointed out, was shared or family data plans. I didn't because I wanted to talk about it separately -- there's a lot to be said about them.
Last month, we heard from Verizon CTO that shared data should be coming to their network sometime this year. Earlier this morning, Engadget was given a heads-up by an anonymous tipster that had some inside information on what appears to be shared data per-line pricing from Big Red.
Although the attached picture is a bit light on useful information, there are a few things to takeaway and things left to speculate.
The only noteworthy information is price per line. Much like with family calling plans, additional lines with a family data plan will supposedly cost $9.99 per month. What's more important than price, however, is what that fee will entail. There are two ways that Verizon can go about it. They can treat shared data just like shared minutes and not add additional bytes to the plan for extra lines. On the other hand, they could bump the allotment by a gigabyte or so for each line added. This key factor will ultimately determine the usefulness of shared data for a large number of users.
We can assume that shared data plans will come in different sizes, much like existing tiers -- maybe 2GB, 5GB, and possibly 10GB.
In my particular case, only the 10GB plan would be sufficient. Alone, I can easily use north of 5GB. Between my mother, sister and grandmother, who might use 1GB a piece, we would have roughly 2GB of freedom. But how much would this plan cost? For an individual, a 10GB plan costs $80 per month, whereas individual 2GB plans cost $30 per month. Let's assume the pricing for shared plans stay the same. (Pricing could still go either way, up or down, and that's why this is such key information.) With four of us on the account, if we each had a 2GB plan, we would be paying $120 per month for data. If a 10GB shared plan costs $80 with $9.99 for additional lines, we would be paying roughly $110 and getting two more gigabytes.
At that point, shared data would only be somewhat helpful, yet not notably cheaper. Since three of us are still on grandfathered unlimited data plans, it definitely wouldn't be enough to pull us away from those. It would take a much larger price cut for it to benefit most users.
Assume the 10GB plan only costs $50 per month for the first user and $9.99 for each addition. On an account with four data users, Verizon would still be getting $80 per month for the same amount of data and the savings for consumers are more significant. In the case where we would pay $110 per month for four users to use 10GB, the price is $11 per gigabyte, versus the usual $8 per gigabyte for a 10GB plan. We might save $10 per month in the process, but Verizon would still be getting the better deal in the end.
It's all very questionable and it will be interesting to see how Verizon goes about it. But pricing is only half of the battle.
Keeping tabs on data as an individual is hard enough. Unlike minutes or text messages, data is dynamic -- no two sites, pictures or videos use the same amount of data. This makes it hard for average users to quantify their monthly use. There are some ways to track it with Verizon's mobile applications for iPhones and Android, but it generally only updates every 24 hours. What's worse is that with three, four or five people on a single data plan, you are no longer solely responsible for how much data is used. To keep everyone from going over, it would require a good deal of coordination or an excessive plan.
I will say that shared data sounds like a good idea. And there are certainly the select few that could benefit from it. But, ultimately, pricing and the size of the caps is going to be the factors that truly matter. Unless Verizon takes a hit on price per byte, shared plans aren't likely going to be any more efficient than individual tiered plans.
In other words, shared data would be an easy way for Verizon and other wireless providers to pull a fast one on a lot of average users, while making them think they're getting a better deal. The customers may be paying less in the end, but they could also be paying more per byte, and thus getting less for more.
What say you, data users? How much does your family pay for data per month? Do you think shared data would help your family cope with data pricing? Would you pay less overall if you were getting fewer bytes per dollar?
