If you think about it, there typically are two times in a product lifecycle when “unlimited” usage for a fixed and relatively low price make sense. When a service provider has just launched service and has a network with significant fixed costs, but few customers, “unlimited” usage makes sense. It offers a simple value proposition, protection from price “surprises” that consumers appreciate.

In the middle of any provider’s product lifecycle, when lots of customers are buying the product and networks have gotten closer to high utilization, and where prices cannot be raised much, unlimited plans can break a business model. Also, the middle of a product lifecycle typically is the time when user demand is well understood, allowing construction of plans that match “typical” levels of usage.

On the other hand, as a product reaches a mature stage, and then passes into a “decline,” and as the typical level of usage is very well understood, unlimited plans can again make sense. The reason is that underlying facilities and processes have been scaled to support a higher level of demand than currently exists.

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At such points, unlimited usage again makes sense. But all that assumes a “single product” business where all revenues are generated by just the one product. In a multi-product business, there can be distinct price points, gross revenue and profit margins for each discrete product. In such cases, there are other reasons for pricing any particular product in a particular way.

Few new 4G mobile networks will initially have much worry about capacity. But that might not be the key issue for setting pricing. If 4G represents the growth model, then it will make sense to merchandise other products to maintain gross revenue and margin for the growth engine.

There also are lots of other ways to supply consumer demand for simple, understandable, fair pricing for usage at various levels. Buckets of voice usage that allow customers to pick plans matching their actual or intended use cases have proven effective at providing both the pricing predictability users prefer, as well as adequate resources to support their actual behavior.

“Unllimited” pricing for 4G services will make sense in a technical sense, as it is unlikely users will tax resources. But that might not be the key imperative. Nor are most products priced exclusively on “production costs.” Brand preference on the part of consumers can lead to pricing based on perceived value, not cost, as such.

It might be true that 4G networks can “afford” to offer unlimited service plans. But service providers might not want to, or have to.

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