As a developer of mobile applications I currently see data costs as a serious limitation to the short term growth of innovative mobile applications and services…
We are told 3G is all about receiving (and sending) music, images and video to and from our phones. Unfortunately, it’s far too expensive. This is not only deterring people from using the few services that currently exist but is also making new services a ‘non-starter’ for developers considering developing 3G applications. Look at Virgin’s radio service over 3G - it’s a great idea but it costs more to listen to it for a few hours than buying, say, the latest and greatest portable MP3/radio! There’s absolutely no benefit of listening to radio over 3G for the excessive extra cost.
A survey was commissioned last year by Nokia, conducted by a NOP World in the UK, US, Germany, France, Denmark, Estonia, South Korea and Greece.
31% said they preferred unlimited-use payments.
9% said they were happy to pay according to the data consumed.
11% said they preferred to pay for a fixed amount of data per month.
24% said they felt there should be no charge extra charge for data services.
The key thing is that people either need to know exactly how much it will cost to access a particular service OR they need to know they can access everything for a fixed cost. Event based billing, where you pay per song or per video, only tends to work when the network operator is in control of the service as they can discount or zero the data usage costs.
If you are a 3rd party service provider you might have to do a deal with each network operator and give them some of your revenue in exchange for zero or reduced data costs to the end user. While this is difficult and time-consuming to set up, I have worked with a few companies who have already achieved this within a limited geographic scope. Other options include designing and producing services that use minimal data or even choosing programmatic SMS and WAP Push where this is appropriate.
Meanwhile, the network operators are currently playing with their 3G offerings in an attempt to trap subscribers. Orange in the UK offer unlimited 3G data - but only for 3 months of an 18 month contract. Vodafone UK offer event based pricing but charge you heavily per Mb when you start accessing services outside of their network. Hence they tempt you in with what they know you want - and later you end up paying heavily to help offset the cost of their expensive 3G licenses.
In the longer term, 3rd party service providers are relying on data tariffs becoming much more affordable as competition sets in.