Phone Bulletin

There was once a time, only a few short years ago, that mobile phone providers wanted consumers to use as much data as physically possible. They offered unlimited texting and data plans, they provided games and other applications that required an internet connection, and they worked to secure appealing browsing interfaces for every new model. In short, the phone companies were hungry for data consumption. And it was easy to see why: with declining call and texting revenues, data charges were fast becoming a crucial driver of income. Companies took a large hit to offer cheap iPhone contracts, in fact, simply because they knew that data fees would more than offset that loss over time.

But that all changed over the past couple years as data networks became increasingly crowded. The first culprit was AT&T, which saw an influx of customers – and of heavy data users – when it became the sole provider of the Apple iPhone. While the deal proved lucrative for the company, it also strained AT&T’s data network and resulted in widespread consumer dissatisfaction that has continued until this day. AT&T has invested more than any other provider to upgrade its network since then. However, the slow upload speeds caused by that initial overload have continued to haunt the company – and competitors have taken notice.

More recently, it was reported that the average iPhone 4S user consumes twice as much data as the average owner of an iPhone 4. This tremendous jump can be largely attributed to the success of the Siri personal assistant, which requires relatively high amounts of data for most of its functions. Now, 3G and 4G networks are increasingly being strained across the board. Mobile providers, in response, are starting to consider what was once unthinkable several years back – the restriction of data amounts. They have also turned to new technologies and approaches in an effort to avoid AT&T’s troubles.

Here are the options providers currently have for alleviating the data crunch, along with a couple pros and cons:

-Restrict Usage

Usage can be restricted by eliminating unlimited use options, implemented tiered data plans, and by increasing prices.

Pros: This approach provides a quick and easy way to avoid data overloads.

Cons: Even with price increases, usage restriction methods usually lead to lower data revenues. They also provide only a short-term stopgap.

-Develop New Networks

New networks currently under development – LTE networks chief among them – can be expected to provide much-needed data relief in the next couple years

Pros: LTE networks offer a longer-term solution to current data demands

Cons: These networks are expensive to implement and won’t solve current needs, especially since most phones will continue to use 3G networks.

-Identify Top Users

Some companies are considering giving individual base stations to consumers at the extreme high end of the data use spectrum.

Pros: Since the biggest users consume a highly disporportiate share of data, this would free up national networks without too great an expense for the provider.

Cons: The approach may turn into a logistical hassle and become only a piecemeal solution, especially as data use grows.

These are the major options currently available for mobile providers. Most will likely pursue some combination of these three. Whatever they do, however, one thing is certain: our current network models can’t carry our growing data demands for too much longer.