Phillip Redman

A member of the Gartner Blog Network

Phillip Redman
Research VP
10 years at Gartner
17 years IT industry

Phillip Redman is a research vice president in Gartner Research, where he leads mobile research in the network services and infrastructure group. Mr. Redman brings almost 15 years of experience in the wireless mobile and telecommunications industry… . Read Full Bio

Coverage Areas:

← →

Cellular Pricing Evolution: One Foot From The Swamp

by Phillip Redman  |  July 2, 2009  |  Comments Off

For so many years buyers of cellular services were so used to complicated and inefficient cellular pricing.  Individual plans made users gamble on how many minutes they would use each month.  Guess too many and you had minutes you paid for but couldn’t use.  Guess too few, and even worse–penalized for overage which doubled and tripled your per minute cost.  The past couple years have seen the evolution from these plans to pooling and flat-rate which are much better ways to buy minutes.  But even so, not everyone has gone this direction yet, so a lot of companies are buying the wrong way and overspending.

Where is this going?  In the next few years I think many companies will start migrating to unlimited voice and data plans.  Launched about a year ago, these plans take the guesswork out.  But list prices are more, on average, than what enterprises are willing to pay per user, around $99-$120 versus the average of $75.  But I’ve started to see negotiated unlimited, flat rate services under that $75 mark at some telecommunication service providers, approaching $50.  It’s just a matter of time, maybe another 12-24 months, before this pricing becomes standard.  Increased competition as cellular penetration tops 80% and new technologies like LTE that will open up additional bandwidth are the main drivers.

Companies like Zer01 , which has just launched a nationwide mobile VoIP service over the AT&T WCDMA network for unlimited voice and data at around $75 will continue to put pressure on providers.  Now I don’t think the coverage or quality (amongst other issues) will be enough to make this company successful, but it’s good to see new models coming to the cellular market.  We might get out of the Neandrathal stage anytime now!

Tomorrow, July 3, the U.S. is starting it’s Independence weekend, with July 4th on Saturday this year.  Happy July 4th to everyone who celebrates it out there and here’s hopes that freedom continues to grow in the world, which seems to be moving even more in this direction.

Comments Off

Category: Uncategorized     Tags: