Population Statistic: Read. React. Repeat.
Friday, April 25, 2021

A pretty clear tipping point in communications and media growth is an industry shift from time/unit-rate to flat-rate billing. The growth of the Web, for instance, really exploded once America Online, the dominant ISP of the mid-1990s, phased out per-minute dialup access plans in favor of an unlimited monthly flat-rate subscription fee (the model most of us still have for today’s broadband connections). The lifting of the built-in restrictions that a la carte pricing forces creates a more ubiquitous all-access service, one that users more tightly weave into their everyday lives.

It’s taken a while, but that offering concept is finally creeping into the wireless phone industry with unlimited talk and data plans, playing off consumer tendencies:

“Consumers avoid these services because they want to know how much they’ll pay at the end of each month,” says Jeff Kagan, a Marietta, Ga.-based telecom analyst. “No longer fearing extra costs, of any kind, is going to drive real change in the marketplace.”

That’s something that’s proved often: Price predictability. Consumers won’t necessarily balk at a set monthly charge, even if it’s inflated. But a variable charge causes anxiety, even if it’s affordable — it’s irrational, but a line item that “flashes” on the monthly household bills scares people away. Removing that factor also removes a psychological barrier, leading to unfettered usage.

It’s still a work in progress. For me, an unlimited plan doesn’t make much sense, as I never get even remotely close to my base-package of monthly minutes right now. I would counterbalance that with extremely heavy data use, mainly plain old Web access; but doing so on the existing handset interfaces doesn’t appeal to me. There’s always the iPhone option, but probably not for another couple of years.

What’s the longer-term prospects of this industry shift? Will players like Blackberry become superfluous when everyone’s personal communications hub meets all accessing needs? Will everyone obsessively check their email, MySpace/Facebook pages, etc. on the go? Would this lead to a more-rapid phasing out of all wired Web setups (at least in residential settings)? For now, price predictability means usage unpredictability.

by Costa Tsiokos, Fri 04/25/2008 12:15:00 PM
Category: Business, Internet, Society, Tech
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