What is the relationship between the structure of a data plan and usage? Do people adapt behavior to the plans, or does the choice of a data plan reflect existing behavior?
The answer matters. If data plan purchases mostly reflect a user’s interest in consuming more data, and if user consumption both grows over time and is shifting to bandwidth-intensive applications such as video, then service providers won’t be able to shape behavior very much, other than by raising prices to discourage consumption.
If, on the other hand, end users respond to packaging details such as actual bandwidth caps, then service providers have quite a few tools which can be used to shape end user behavior.
Data from Ericsson suggests a bit of both processes might be at work. One difficulty is that bandwidth consumption seems always to be asymmetrical. There are a small number of users who account for a disproportionate share of usage, skewing all “average” figures.
So what happens when any manufacturer releases a popular new model? Ericsson argues that
high volume users tend to be early adopters, and will be among the first to buy the latest devices.
The practical implications are that “typical” consumption on any device cannot be determined until the great mass of “ordinary” users adopts any specific device, from any single service provider.
It is not uncommon for average usage to decrease over time for any given device model, for that reason. “Typical usage” is a far different issue from “average” usage. In that sense, choice of data plans follows behavior.
On the other hand, usage patterns are also related to the data plan that comes with a device. That is significant because it suggests people actually modify their behavior based on plan policies.
They might intentionally choose to conduct some application usage using Wi-Fi, avoid using some apps on mobiles and take other steps to modify their own usage choices as a reflection of their data plan policies.
If so, service providers have a wide range of options for shaping end user demand, using price and other packaging mechanisms. Generally speaking, people use more data when they buy bigger buckets of usage.
But it is a nuanced matter. It can’t be precisely determined whether people use more data because they have bigger plans, or have bigger plans because they use more data over time.
