Unlimited data means more to smartphone users than savings

Unlimited data means more to smartphone users than savingsAdd this to the shocking information pile: mobile customers want unlimited data. This discovery was made by research firm Sanford Bernstein, which conducted a survey of more than 800 smartphone customers over their feelings on data caps, carrier choice, and pricing. They discovered that the prospect of unlimited data may be the most important criteria for users as a whole—even more than sticking with their favorite device.

The firm said that current wisdom has mobile customers being the most loyal to their favorite device—they will go anywhere as long as they can use the phone they want. (We have seen this behavior in recent years with the iPhone at AT&T, and more recently with some high-profile Android-based phones at other carriers too.) That attitude may be real, but Sanford Bernstein says that the appeal of unlimited data could override people's urge to follow the hot products.

"The new conventional wisdom is that carrier loyalty has been replaced with loyalty to the device. But high inclination to switch carriers and phones to maintain an unlimited plan suggest that perhaps the plan itself is more important than either one," equities analyst Craig Moffett wrote.

The latest tiered data plans are usually cheaper than their limitless counterparts—AT&T's unlimited plan was $30 before the company introduced a 200MB for $15 tier and a 2GB for $25 tier—but Sanford Bernstein says the savings don't matter as much as carriers would like to think. A third of those surveyed said they liked AT&T less after the company introduced its data tiers—customers would apparently rather live without the stress of worrying about their data limits, and that peace of mind is worth the premium they might pay for an unlimited plan.

Data tiers are quickly becoming the de facto standard within 3G in the US (though Verizon does still offer an unlimited plan), while the carriers are still feeling out whether tiers are necessary for 4G/WiMAX/LTE. Sprint VP of 4G Todd Rowley said recently that that Sprint is still trying to attract new users to its higher-speed network and doesn't plan to start capping downloads unless data use explodes, while Verizon said it's considering introducing speed-based plans to the LTE network it's launching next month.

Moffett said that carriers who retain an unlimited option could definitely attract more customers, but also warned that it could be a blessing in disguise. "Unlimited data plans could become a major source of differentiation, attracting customers and giving still-unlimited carriers a subscribership boost," Moffett said. "At the same time, however, carriers who maintain unlimited pricing in the face of AT&T's move to usage based pricing could self-select to the heaviest users, impairing future profitability."

Verizon users are the heaviest data gobblers, according to Validas, so this problem may already be in the process of manifesting itself. We're almost afraid to find out what will happen when Verizon finally gets the iPhone.

Source: arstechnica

Tags: mobile phones

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