IBM:Tiered mobile data pricing here to stay

By , Network World |  Mobile & Wireless, telecom

While many may hate the tiered pricing models that AT&T rolled out last month, they're also likely the future of mobile data consumption according to analysis by IBM.

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In a paper analyzing the telecommunications market over the next five years, IBM Global Business Services says that as IP-based high-speed mobile data standards such as LTE and WiMAX spread more broadly throughout the world, carriers will give up trying to stop over-the-top providers such as Skype from riding over their pipes and will eventually "enter into formal partnerships" with them. But because the carriers will be losing the revenue they once generated through minute-based cellular plans, they will have to make up for it by eliminating their all-you-can-eat data plans.

"If people value connectivity then they must pay for connectivity," says Ekow Nelson, the global leader for the communications sector at the IBM Institute for Business Value. "With all-you-can-eat models there's going to be no way for carriers to compete. This will be an adjustment because most users have been conditioned to enjoy unlimited access to over-the-top services for free."

Looking at the broader telecom industry, IBM games out four possible scenarios for how the industry will develop over the next five years. In short, the scenarios are that declining consumer spending leads to revenue stagnation, leading to even further consolidation within the industry; a market fragmentation that will be accelerated by municipal and government efforts to bring broadband to underserved and unserved areas; a scenario where big providers consolidate and band together to aggressively compete with over-the-top service providers; and finally, a scenario where the barriers between over-the-top services and carriers comes tumbling down "as regulation, technology and competition drive open access."


Originally published on Network World |  Click here to read the original story.
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