Smartphone Success Spells the End of All-You-Can-Eat Data Plans

Carl Weinschenk

The sense in the industry is that adjustments have to be made as the amount of wireless data-mostly headed to and from smartphones-continues to grow.


One school of thought holds that the bad financial picture dissuaded carriers from upgrading capacity and even proactively replacing fading gear with the alacrity with which they would have done so in flush times. Most carriers slid by because they weren't charged with supporting the iPhone. The one operator that was, AT&T, was set up for something of a fall.


Ralph de la Vega, the president and CEO of the AT&T's wireless unit, acknowledged significant shortcomings and said that the carrier will take steps to improve performance. The steps could be as light as politely asking heavy users to throttle down or as great as changing the entire approach from flat rate to metered.


Other carriers should keep their schadenfreude in check, however. The reality is that the stress on all networks will only accelerate and affect all carriers. To this point, the poster child for the smartphone has been iPhone and its AT&T carrier. That is about to change. More devices, and devices that will at least be the equal of the Apple device, are coming. Indeed, Time Magazine has anointed Motorola's Droid as the top gadget of the year. Any problem that affected AT&T disproportionately this year will be more widespread in 2010.

CCS Insight, according to a report in PC World
, predicts that more than 50 Android-based devices will be released in 2010, about a five-fold increase over this year's crop. The story outlines who is coming to market: Acer will unveil five or six Androids during the first half of the year, Sony Ericsson will intro the Xperia X10, HTC will take the wraps off five devices and Motorola at least 10, according to the firm. There also will be non-Android devices aplenty, of course.

More devices will almost certainly translate into more customers and more data. The bottom line is that the days of all-you-can-eat data plans are numbered, and that a system in which subscribers pay for how much they consume seems inevitable. Customers of anything are resistant to price hikes, which will be how the change will be perceived. It will be a painful transition-but a necessary one.

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