Monday, January 29, 2007

Billing, billing, billing...

In my Mobile 2.0 Manifesto, I mentioned that a key element for the success of Mobile 2.0 will be moving everybody in mobile to flat fee (item 4). It is the only possible model for people to embrace data usage on a cellular phone.

Luckily, we are getting closer to this goal in the US. Sprint has a $15/month unlimited plan which is fantastic (too bad is not based on GSM...). T-Mobile has a $5.99 plan with some limitations, but the price is right (and there are ways around the limitations ;-)

It is not all good, unfortunately. Cingular (sorry, at&t) unlimited plan is $49.99, which is a non starter for consumers... If you look at the recent data ARPU from their last quarter, it was $7.19... A number that include SMS, which still represent the largest chunk. I honestly believe they would be better off with a $15 unlimited plan. Higher data ARPU, simpler plans, happier customers. What's wrong with that?

When you look at Europe, it is even worse. Almost everywhere you find only pay-by-kilobyte plans. I wrote it before, but... how the heck do I know how big is a kilobyte? If I am downloading my email, how can I know how much data will I consume? I will not know, because I am not going to use it... And it does not help when you hear horror stories, like the guy who got a €50,000 bill for data usage in a month... It scares people away (rightly so).

There are bright spots, however. 3 in particular (that's Three, like H3G). They have in Italy a €19 plan, with 5 Gigabyte of traffic. I do not know how big is a kilobyte, but I know a Giga is big enough for a lot of emails... In the UK, they launched the X-Series: X-Series Silver at £5 (including Skype calls) and X-Series Gold at £10 (including Sling TV). They call them "unlimited plans", but they are limited (e.g. 1G/month for browsing and 5,000 Skype to Skype minutes per month)... Still, they are a great deal and a great start.

It is funny: Europe had the best SMS plans and SMS exploded. US had the worst SMS plans and SMS never took off (please, I beg you, stop asking me to pay 15 cents for receiving an SMS...). For data plans, it is exactly the opposite. The US is ahead. Therefore, the initial growth will happen in the US. Europe will follow, hopefully fast.

In essence, item 4 of my Mobile 2.0 Manifesto is still a bit far from becoming mainstream. In particular in Europe. But if you look back at a year ago, the jump was impressive. It is getting close to reality. Let's just wait for a few months more and the iPhone is going to crack the data plans market open...