Multi-device or “family” rate plans will be a key driving factor in the expansion of U.S. data revenue from $81.4 billion in 2011 to $151.9 billion in 2016, according to analysts at Gartner
The leading service providers in the U.S. market have been talking about shared data plans for years. And there are good reasons for doing so.
It wouldn’t be the first time the industry has moved to family plans. It did so with voice and text messaging, for example. If you understand why service providers did that, you will understand why they will move to similar policies for mobile data.
The family plan was developed to solve one specific problem. Most adults already were buying mobile phone service, which left only one potential user segment that had not yet adopted, and could drive unit growth. That segment was children of the adult users.
Family plans made it possible for parents to equip their children with mobile devices at prices the adults could justify. And that was the primary way mobile service providers could drive adoption of additional units, when the adult user market was approaching saturation. There also were churn benefits.
With most service providers already moving to mandatory mobile data plans for smart phones, one way to provide clear incentives for faster adoption is to reduce the incremental cost of adding additional smart phones to accounts where there are significant feature phones in use.
With average revenue per user going down, the best way to increase revenue is to get more devices on the network, including smart phones and tablets equipped with mobile broadband capability.
Family data plans will mean that the incremental cost of adding each additional device will be lower than at present.
Also, as more services are delivered using cloud computing mechanisms, the importance of “always on” connections is magnified. Without a broadband connection, a cloud service won’t work.