The Changing Mobile Data Landscape, Part 2

If you haven't, go check out part 1 of this series, in which I argue about the increasing role of feature phones in mobile web, and possibly apps.

I think a major shift in how we pay for mobile data is coming, within a year or two. And content companies need to figure out how to conserve bits. They aren't free.

The role of data plans

Let's take a look at unlimited data plans for a moment. Unlimited data plans are great! They provide enormous freedom! No worrying about how much data you use! Terrific!

And it is terrific. It's great for people who can afford to spend $70 per month for each phone in their family. That's not terrific for everybody. And it leaves people like my father, who want smart phones and that freedom but aren't planning on watching video or tethering, paying for heavy users.

Variable pricing is inevitable

Unlimited data plans not only reduce access to a larger number of people, they also cause congestion problems. There is no cost to using the network, and there is cost to not using the network. It's annoying on many devices to switch to wi-fi; it's inconvenient to change your email or web habits.

As the operators increase available bandwidth, demands will go up. Video streaming, data cards, and tethering become more popular. People enter the world of mobile data from no experience to 3G cards, possibly with the intent to replace their home connection.

As the experience degrades (think AT&T access in places like New York and San Francisco), the operators' brands take a major hit. Vehicle traffic planners have known this for years: roads fill to capacity. The existence of the larger roads change drivers' behavior, even to purchasing houses further from town.

Some sort of change in pricing model is inevitable. Mark Lowenstein over at FierceWireless provides a few options. You can read a deeper discussion on the problem, and the solution, over at Slate.com.

And yes, Verizon already has a tiered data plan.

Global concern

I've just set out the argument for why the U.S. will not have universal unlimited data. That was the tough part of the argument; the economics for unlimited data are better here than in many places. In much of the world, pre-paid plans with pay-per-kilobyte are the norm. And this includes hundreds of millions of users (over 300 million in India alone) who do not have computer access to the Internet.

Increasing role of smart phones

As we discussed last time, feature phones are becoming more capable. Further, they have cheaper data connections than do smart phones, because on average they are used less. (There's that tiered pricing again).

On top of this, smart phones are being pushed deeper and deeper into the feature phone market. Nokia has done this for years, and customers do not even realize they own a smart phone. Blackberries and Windows Mobile devices are being used as feature phones. Android phones "for the masses" are being deployed.

As smart phones get pushed deeper into the market, they will be selected by prepaid users more and more. Many of these users will still be paying per kilobyte.

Design implications

Right now, the bulk of the mobile web industry is moving to rich web interactions. But at what cost?

In a world of pay-per-kilobyte, is that 12kb JQTouch framework worth it? Sometimes, yes. But frequently, no.