Alan Weissberger

TiECon 2010 Report: Wireless Market Status, Trends and Future Directions


TiECon is 'The Indus Entrepreneurs' (TiE) flagship annual conference and signature event. It typically draws a mix of entrepreneurs, venture capitalists, investment bankers, market researchers, technology executives and strategic marketing professionals from all over the world. The participants come together to network, learn and hear about latest industry and technology trends in the varied fields of software, mobile computing, biotechnology, clean technology, Internet and others.

At TiEcon 2010: It’s in Your DNA, we attended a "Business Boot camp" session on communications and networking skills, as well as three sessions related to Wireless Communications . The conference was held May 14-15th in Santa Clara, CA. The three wireless sessions were:

  • Wireless Power Connect 1 – The Big Market Triggers

  • Wireless Power Connect 2 – Audience Engagement and Metrics in Mobile – Leveraging Mobile Apps, Metrics and Targeting to Drive Value

  • General Session: Mobile Consumer and Enterprise Applications – Leveraging the Power of LBS and Real Time Web

Hakan Eriksson, Sr VP and CTO of Ericsson, made a very interesting comment at a pre-conference VIP panel session which set a high bar for the wireless sessions to follow. "Connectivity is the most important requirement between the cloud and device. Though we have started taking it for granted like breathing, more needs to be done in the US to invest in connectivity," he said. This seems quite reasonable, as more and more people use mobile computing devices (e.g. smart phones, eReaders, and tablets), enhanced and better wireless connectivity is needed for broadband Internet access and to cloud computing services. With current 3G networks at or near capacity how will they accommodate all the new bandwidth hungry devices forecast for the next few years? And how can such connections be made more reliable and available- independent of the user's location within a cell or sector?

This first article in a two-part series, reports on the first TiECon wireless session, which actually covered much more than its title – “Big Market Triggers.” The session assessed the changing wireless world landscape, examined the new market dynamics, and explored future opportunity areas for entrepreneurs in the wireless space. But first, a word about the TiE 50.

TiE 50 Wireless Winners for 2010

The TiE50 list of top start-up companies was started in 2009. Last year's winners created over $2B in market value. Several of the winning companies enjoyed successful exits (great for VC investors) within just the last year. There were 4000 submissions received for the 2010 TiE50 awards. Vish Mishra, President of TiE Silicon Valley had this to say: "The TiE 50 represents the best in entrepreneurship. The winning companies have to be risk-taking yet pragmatic, visionary but market-aware, and a passion to be the best. We hold up these companies as role models for any enterprise, big or small, established or being incubated, which aspires to success in a dynamic and demanding marketplace. We fully expect that the TiE 50 winners in 2010 will build on the success of winners in 2009 like Kazeon, Mimosa and" Within the 2010 TiE 50, there were 10 winners in the Wireless space. These were: Avatron Software; BuzzCity Pte Ltd.; deCarta; Metismo Ltd.; mFoundry; Movirtu Limited; Rayspan Corporation; SiBEAM; SpiderCloud Wireless; and Ubiquisys. The complete list of winners may be viewed at:


Review of Wireless Power Connect 1. – The Big Market Triggers

Session Description (from TiE):

The mobile ecosystem couldn’t have finished the decade with more of a bang. Android was the face of the show at MWC with 200M mobile devices forecast by the end of 2010. Mobile advertising has finally hit that tipping point with the Google and Apple acquisitions of Admob, Quattro and others. App stores have gone mainstream creating an ever-larger battle of control between OEMs and operators. Location services are finally emerging with proximity advertising and Google Maps becoming the industry standard. At the same time, Microsoft has shown that they may still have their mojo with an overwhelmingly positive response to the Windows Mobile 7. And Nokia may be passed their trough showing improved earnings while Apple continues to lead the charge. All of this represents only a preview of some of the many hot-button issues in 2009. This panel should make for some great industry debate and discussion!

Moderator: Mark Lowenstien, Managing Director, Mobile Ecosystem


  • Sudhi Herle, VP of Mobile R&D for Samsung

  • Mario Queiroz, VP Product Management, Google, Inc.

  • Arpit Joshipura, VP Strategy and Business, Ericsson Silicon Valley

  • Richard Wong, Partner, Accel Partners

Session Summary:

TiE host Raj Singh welcomed the attendees by stating, "The wireless industry has never been so exciting. There are a great variety of new (mobile) devices, corporate acquisitions, and many innovative applications."

Moderator Mark Lowenstein of Mobile Ecosystem followed with a few opening remarks and issues for the panel to discuss.

"Where's the (mobile) industry going?" he asked and then attempted to set the stage for the panelists to answer that question by detailing the changes the industry has experienced.  Mark noted that there has been an important shift in the balance of power in the wireless industry, with Apple and Google playing a much more significant role in the mobile ecosystem. This has resulted in substantially lower "barriers to entry" for applications sold through (Apple) app stores and mobile devices that support the (Google-led) Android platform. There has been "unbelievable growth in mobile data." It now accounts for 30% of mobile operators revenue. (Ericsson claims that in Dec 2009, mobile data traffic surpassed cellular voice traffic for the first time). A few other data points are the following:

  • Smart phones account for 35% of North American cell phone sales now, up from zero before the iPhone came out a couple of years ago.

  • There is an accelerated and compressed innovation cycle in mobile data. Network operator CAPEX has increased – even during the recent recession- to handle the big boom in mobile data traffic.

  • Wireless is a very personal technology, especially when it is location enabled. Mobile advertising is and will take advantage of personal user preferences and locations to deliver more targeted ads.

  • But there are limitations (or impediments to growth): small screen size, difficulty inputting data (via keyboard or touchscreen), ROI economics of wireless are very different from fixed broadband wireless access, network capacity and aggregate bandwidth limitations have been important issues for mobile network operators (especially for AT&T's 3G network). Mark did not mention battery life/ charging as a limitation, but it did come up in the Q and A session.

The key wireless trends, according to Mr. Lowenstein are the following:

  • Growth of app stores to sell applications developed by small, embrionic software start-ups

  • Finding better ways of discovering (presence and location) of mobile data users

  • Voice will play a key role in mobility (presumably referring to Google voice and Skype over VZW)

  • How will "Always on" devices be distributed and priced?

  • Mobile commerce and advertising offer huge opportunities. How will this evolve?

In these opening remarks and later comments, Mark did not address issues related to Machine to Machine (M2M) communications, "the Internet of things," the battle of mobile media players (e.g. Adobe Flash disallowed on Apple iPhone and iPad), impediments to mobile data growth (especially capacity limitations of 3G networks), or fixed/ nomadic wireless broadband access (e.g. WiMAX). But in fairness to him, this 75 minute session was too short to cover all the important wireless issues.  In fact, it went into an "overtime" Q and A session, as described below.

Sudhi Herle of Samsung made many profound, insightful comments during the discussion. His first of these was, "How can multiple (wireless) devices be linked together to create a better and more cohesive user experience? There are less than 500M smart phones worldwide. How can we make them more relevent to the farmer in India, the fisherman in Bangladesh, and the 3.5B mobile users in the world?" Sudhi asked, "How can a smart phone enrich a person's life and make it more meaningful?"  The challenge for device makers is to be able to target a "smart" handset to a particular class of users, who will need customized applications. Mr. Herle believes the industry needs to pay more attention to consumer satisfaction. We concur.

According to Sudhi, "Everything we call a smart phone is in reality a dumb phone. There are too many clicks required for the user to get to where he wants to go. As a result, the smart phone is actually just a small PC in your pocket. There is no inherent smartness in the smart phone. Why isn't there an app to tell me what the traffic is like on my route from home to work in the morning?  The challenge is to make the phone smart, relevent, timely and cost effective for the user." 

In a post session email exchange, Mr Herle stated that the "Traffic and Commute" smart phone app is not very difficult to do at all.  However, no one has done it yet.  Here are the suggested steps to realize it:

   a) User selects one of many routes as their "favorite" and saves it.
   b) Traffic information is available as a service from many operators and Google
   c) It is straight-forward to match the traffic alerts to the saved favorites routes.
   d) If there is a match, display an alert to the user, else, don't.

A really smart phone could recorded the user's daily commute and over time "learn" which routes are most frequent. The "learn" part is based on statistics.  Then, the app woud match the traffic alerts to the learned routes and notify the user accordingly.


Mario Queiroz, VP Product Management for Google's Android Program offered quite a bit of insight and plenty of statistics.

He described Android1 as "an open mobile OS and application platform" that has reduced the cost of mobile devices by 20% (no source was given for this statistic) and has stimulated the creation of many new mobile apps. Google expects "the mobile web will bring the Internet into the hands of many more people." This will be accomplished via a large range of mobile devices, form factors, display and keyboard types. 

Editors Note: Google is only working with a small number of Android enabled device vendors, e.g. Motorola and HTC and is no longer selling Android phones on its web site.

According to Mario, Android and the mobile web will make the wireless space a lot smarter (but how?). The more people use the Internet, the more they will use Google search and Google apps.

In its first two years of existence, the mobile Internet has grown eight times faster than the wireline Internet during its comparable first two years (no source was given for this statistic). For Google, "mobile has become the primary Internet access device." Mobile device search generates five times more search queries than for fixed access PCs. And smart phone searches are 30 to 50 times more than searches initiated from feature phones.

A very interesting statistic was that for Android enabled smart phones, 30% of searches have been through voice queries (rather than touch screen or keyboard entries). Another is that there are more than 50M active users of Google Maps- most of them from mobile devices. 65K Android phones are sold everyday by Google and partners (e.g. network operators offering Android phones from Motorola and HTC). Mario ticked off the following key issues for the mobile industry:

  • Availability and adoption of 3G and soon 4G mobile data networks

  • Smart browsers and OS's (e.g. Chrome OS) to make Internet access simpler and faster

  • Making phones "smarter"

  • Powerful application development platform (e.g. Android)

  • Simple data plans (will flat rate with costly overage charges prevail in the near future?)

Arpit Joshipura, VP Strategy and Business, Ericsson Silicon Valley has a very keen perspective on the wireless industry. He has twice participated in IEEE ComSocSCV meetings in the last six months on the topics of IP, converged networks, LTE, and the mobile packet core. Ericsson is the world's largest telecom equipment and wireless infrastructure vendor. Their equipment is in 180 countries, including AT&T, T-Mobile, and LTE/EPC wins at Verizon and Metro PCS in the U.S. They also manage network operations for Sprint's wireless and wireline networks.

Here are a few key industry trends he sees:

  • A tipping point was reached in Dec 2009 when mobile data traffic first surpassed cellular voice traffic at 140K terabytes per month and forecasted to grow at a 100% annual growth rate (by Cisco and several market research firms).

  • Huge connectivity will happen from M2M communications. The industry should think beyond phones and consumer gadgets. Ericsson predicts there will be 50B connected devices by 2020.

  • U.S. has taken the lead in mobile devices and 3G network access. Carriers (AT&T and VZW) have judiciously used the 700MHz spectrum they've acquired

  • Network and infrastructure business case: 1G bytes of mobile data costs < $1 to produce. So operators charging $30 per month for a mobile data plan can make money. (But I don't think Arpit took into account that data plan also has to recover the cost of the mobile handset that carriers heavily subsidize- please see Sudhi's emailed comments below).     

  • In a post session email, Arpit stated, "this was a Europe Business case where subsidies are not that common."

  • LTE is real! Telia-Sonera has deployed a live LTE network in Sweden (with Ericsson gear, of course). Users there are getting 20- 50 M bits/sec in motion, which is true 4G performance. At the MWC this year in Barcelona, Ericsson demonstrated 1.2 G bits/sec over the air with LTE.

Richard Wong, Partner, Accel Partners said that relative to 10 years ago, business conditions have changed dramatically for mobile network operators. The industry is moving from a carrier centric/ walled garden model to an open model for devices and applications. Android is breaking down the walled garden and creating new opportunities for start-ups and new players to enter the mobile eco-system. The caveat is that there's a lot of fragmentation in this space. Differentiation of device (software) platforms limit interoperability of applications.

Mark Lowenstein chimed in that "there are tectonic changes in business models and the balance of power in the mobile space. He asked what are the real needs of the industry.

Richard responded first by suggesting the mobile industry needs to be more intuitive with better discovery (of what?) capability. Mr. Wong also believes that mobile context should be integrated into voice activated searches. Location Based Services (LBS), the subject of the third TiECon Wireless Session, was described as a "worm hole between the real world and the digital world." The challenge is to relate the digital world to real world transactions via LBS's.

Arpit surprised some attendees by saying that Ericsson is NOT looking for incremental innovation (as is the case with many research labs today). On a global scale, Ericsson i looking for disruptive technologies that can change our thinking and improve the user experiences. They are looking for technologies with "built-in" interoperability that might solve the problem of market fragmentation. For example, interoperable multi-media technologies that might replace point to point or multi-point video conferencing. "Value and experience wins, not technology," Arpit said (and we certainly agree with that from over 40 years of experience).

How will the 50B connections (projected by 2020) get used? Arpit opined they'd be mostly in health care and automation. Not necessarily smart grids or utility networks, which are "taking a different standards track." What kind of network demands (bandwidth, latency, jitter, error rates, reliability/ availability) will these huge number of devices require? And how will they all get integrated into the back end of the network?

Mario jumped in to state that "cloud services are very enticing for many entrepreneurs."  The key is to be able to take advantage of cloud platforms to build applications.

Sudhi shifted the topic to LTE by asking "what does LTE mean to the average (mobile) consumer?  Answer: speed and latency.  There is almost a 10x speed improvement over 3G and the latency of a Google search query will be noticably shorter.   He then related LTE with cloud computing:  "Cloud services will enter a totally new dimension with a 10x improvement in bandwidth and latency for an "always ON" device. This will help mobile users quickly find information and experience new services that take advantage of faster speed and lower latency.

Arpit agreed that connectivity to the cloud will be extremely important.  He further opined that mobile network operators are at a very low level in the value chain.  They currently own the licensed spectrum – a precious resource equivalent to oxygen.  They also provide billing, customer care, and back end network management.  However, they need to move up the value chain to capitalize on the mobile broadband opportunity.  Will they focus their efforts on value added services over LTE?

Mobile operators took their time getting 3G deployed in mass, but it looks like LTE might be deployed much faster.  There are already 65 mobile operators committed to LTE and there is a massive push to show innovation and leadership.

Mario then weighed in with the comment that Android device are being shipped by 62 mobile operators that have 3G networks.  He would like to see operators invest in technologies to make networks "smarter."

Sudhi said that the operators have a key role to play, but for how long remains to be seen.  Users don't want to pay more than $199 for a smart phone, but the production cost is much higher.  If operators continue to subsidize smart phone sales (hoping to make up the difference in multi-year data plan contracts), they will charge many users more than they are willing to pay for service, especially if they exceed the traffic quota and incur overage charges.  Wireless is a last mile technology, where operators pay for spectrum and infrastructure.  Sudhi estimated it costs the operator $5 to $15 per subscriber per month to recoup the cost paid for the licensed spectrum it owns.  

Another issue is trust.  Customers trust Amazon, Google and Yahoo, but not most mobile network operators.  How can operators win users trust?  Can they do so just by providing mobile access, reselling phones/devices, offering flat rate data plans and doing mobile billing?  That remains an unkown, huge question mark.

In a post session email, Sudhi elaborated on the changing role of the mobile network operator.  He made three important points:

  1. Consumers are unwilling to digest a price point of more than $199 for a smart phone.  Since the cost of a smartphone is much higher than $199 (it's between $800 – $1K), the operators have been subsidizing the difference and recouping the cost by locking in the user to a multi-year contract.  If the operators don't continue this subsidization, then adoption of smartphones       will fail. This subsidy is one of the main reasons for the explosive adoption of
  2. Apple's iPhone $5-$15 per month – the spectrum auction cost, when spread across the mobile subscriber base, works out to $5-$15/subscriber. It is a one time thing.  In other words, spectrum is NOT free and subscribers (eventually) will pay for it.
  3. Trust – my observation is that a consumer already has a "trust relationship" with Amazon, Google etc. for reasons that have nothing to do with wireless. So, when there is Internet connectivity in the palm of your hand the operator providing that mobile connectivity is in some sense "marginalized."

Richard said that operator are in a very difficult position and would not likely be the portal to provide consumers with a variety of mobile services.  Who will was not mentioned.

This author believes that operators are in danger of being marginalized or disintermediated by value added players that use their infrastructure.

Arpit affirmed that charging and billing plans would need to change to attract more mobile customers.  But how and when?

The topic than shifted to mobile advertising.  What opportunities are there for innovators in that space?

Mario noted that mobile display advertising has gotten a lot smarter and better, but it's a very young industry.  He believes we'll see a lot of targeted ads, based on customer preferences, in the near future.  By knowing the mobile subscribers location, what her or she is doing, mobile ads can be more personal and hence more effective. 

Richard commented that "we're at the end of the beginning" in this space.  He noted the "phenomenal growth of AdMob's presence" and predicted that "the gradient of distribution (of mobile ads) would spread out."  There are "massive opportunities" to add value here, he concluded.

Sudhi opined that "mobile advertising is in its infancy."  The goal should be to facilitate or complete a transaction.  The number of transactions the ad produces should be the most important metric; not CPMs (Cost per thousand impressions). The CPM model refers to advertising bought on the basis of impression,  in contrast to the various types of pay-for-performance advertising, whereby payment is only triggered by a mutually agreed upon activity (i.e. click-through, registration, sale).

Arpit commented that global (mobile) advertising revenue only pays for 30% of the mobile infrastructure, which is insufficient to subsidize "free" content.

Mario got in the last word on this topic, by stating that "due to improvements in mobile browsers, the mobile web is becoming more like the desktop web.  Queries on mobile phones are simpler than they've ever been and this will be a big boon to mobile advertising."

Question and Answers

There was only time for a couple of questions from the audience as the session time had expired.  The first such question in the "overtime" session was about power management and battery life of mobile devices.

Sudhi noted that battery life has actually decreased in recent years and that most people carry arround chargers to recharge their mobile devices when not in use.  He said there is a constant battle (more like a tug of war) between advances in battery technologies and power hungry rich functions built into mobile devices.

Arpit offered a way forward.  He suggested that app developers need to work on understanding and writing energy efficient applications that don't use too much power.

Sudhi said that it was the LCD screen that was the biggest power hog on mobile phones today.

The next question was for Sudhi who was asked to elaborate on his earlier remark about the need for innovation on low end mobile phones sold in developing countries (e.g. India and Bangladesh).  He said that Samsung and the industry at large was grappling with the relevency of producing smart phones for poorer developing countries.  "The low end market is extremely cut throat," he said (meaning that any profit margin would be hard to realize).

Sudhi then brought up an area that he thought might be attractive to entrepreneurs involved in analog circuit design:  how to reduce the complexity of supporting multiple radios, operating over multiple frequency bands, in the same hand held device?  He suggested the solution might be tunable antennas and analog front ends.  Better and more efficient power amplifiers are also needed, he asserted.

At this point, Mark closed the session and invited the attendees to move to the reception area for networking.  This author attempted to do so, but was unsuccessful.  The reason why is beyond the scope of this article.

Stay tuned for the second article in this series and please submit comments in the box below.  Type "anonymous" if you don't want to reveal your name.



1 Google's Android was the fourth most popular operating system on smart phones sold in the first quarter, according to the Gartner Group. This puts the company ahead of Microsoft (Windows Mobile) and in a very good position going forward, as mobile web browsing and search may soon surpass desktop and notebook PC web access.

Author Alan Weissberger

By Alan Weissberger

Alan Weissberger is a renowned researcher in the telecommunications field. Having consulted for telcos, equipment manufacturers, semiconductor companies, large end users, venture capitalists and market research firms, we are fortunate to have his critical eye examining new technologies.

12 replies on “TiECon 2010 Report: Wireless Market Status, Trends and Future Directions”

Interesting that voice search on Android is reported at 30% of searches.  I have only used voice search only a handful of times on my Android phone; I must be the odd man out.  

It is also an interesting cost figure regarding licensing wireless spectrum.  The question is whether the prices would be $5 to $15 less if the licenses were "free" to the carrier or whether the lack of auction fees would simply increase the profit margins of the operators.    

Very comprehensive summary of the TiECon PC Wireless session.  Lots of valuable information and revealing stats from the panelists.  The author must take incredibly detailed notes and his perspective greatly enhances this summary report. 
Was the session recorded and if so, will it be made available for audio playback?
When will part IIarticle  be published?

Thank you all for your positive comments.  Even negative comments, if constructive criticism are appreciated!
I'd like to share an observation I made to Session Moderator Mark Lowenstien about mobile broadband subscriber and mobile data traffic growth.  The assumptions for this phenomenal growth are predicated on their being sufficient aggregate network bandwidth to support the many new smart phone/ tablet/ game users and applications.  That in turn will require a move from current 3G to either 3G+ (e.g. HSPA+) or LTE.  The current 3G networks won't be able to support the huge increase in mobile data traffic -even if re-engineered with pico cells, more base stations, and off load to WiFi hot spots and/or femto-cells.  If that doesn't happen by sometime next year, the entire mobile Internet industry will slow down precipitously.
Currently, the two largest U.S. wireless carriers are taking different routes to upgrade their mobile networks- AT&T is going with HSPA+, while Verizon Wireless  (VZW) plans to launch LTE later this year.  But there's a battle brewing between these two telco giants.
AT&T's decision to move ahead with a nationwide rollout of HSPA+ technology makes sense from a business and technology standpoint, said AT&T Operations CEO John Stankey.  He also crticized rival Verizon Wireless, claiming the LTE ecosystem is not mature enough yet for a commercial rollout, and that Verizon's first LTE phones will be clunky.
In an interview with GigaOM, Mr. Stankey said AT&T's upgrade from HSPA 7.2 to HSPA+ will cost around $10 million–a fraction of the $18 billion to $19 billion AT&T will spend on its wired and wireless networks this year. The carrier expects to cover 250 million people with HSPA+ this year, and the upgrade will boost the carrier's real-world download speeds from 3.5 Mbps (on HSPA 7.2) to around 7 Mbps (on HSPA+). Stankey said the action will give customers a speedy network to fall back to from LTE, once AT&T deploys that technology.  AT&T remains committed to deploying LTE in 2011.
Read more:
Meanwhile Verizon Wireless is on track to deploy LTE in 25 to 30 markets, it has previously announced, after successful testing in Boston and Seattle.  LTE trials there reportedly saw peak download speeds of 40M to 50M bps and peak upload speeds of 20M to 25M bps—"significantly faster" than current 3G speeds on Verizon's own or competitors' networks, the carrier said in a March 8, 2010 statement.   Data rates were an average 5M to 12M bps on the downlink and 2M to 5M bps on the uplink. Further, Verizon said it successfully tested calls involving streaming video, file uploads and downloads, Web browsing and VOIP (voice over IP).
Read more at:

Here's an addendum that AMPLIFIES a point made by Sudhi of Samsung about mobile operators subsidizing smart phones by locking in users to multi-year contracts.  In addition to incrementally recovering the cost of the smart phone sold from the user's monthly bill, AT&T as well as VZW are recovering the cost based on very high early termination fees.  On May 21, 2010, this was announced:
AT&T's new early-termination fee (ETF) for the iPhone: $325
Come June 1, AT&T is raising its early-termination fee on smartphones to $325 from $175.  the company is following in Verizon's footsteps here. Like its rival's ETF, AT&T's drops $10 per month for each month of a two-year contract. Which means that at the 23rd month of a two-year contract, AT&T subscribers must pay $95 to leave the carrier. The contract is nearly over, yet subscribers are obligated to pay nearly a third of the full ETF if they break it at that time.  ETF's were created as a means of recovering legitimate costs associated with subsidizing mobile phones. If AT&T is paying a $325 subsidy for the iPhone, the company should be able to recoup that money when customers break their contracts. But does it really stand to lose $95 if they do so in the 23rd month?  Doesn't seem likely if those customers can walk away just a month later without consequence, taking their handsets with them.

The wireless carriers are between a rock and a hard place, IMHO.  For years, they have counted on adding more subs and locking them up with a multi-year contract that subsidizes the smart phone that they sell.
Well, it looks like that game is over!  Additional subscriber growth is negligile and more and more subs are opting for pre-paid plans from lower cost carriers like Metro PCS.  In addition, the two largest carriers (ATT and VZW) that are selling popular smart phones have a huge challenge in preventing their networks from becoming saturated with all the data and video traffic they have to handle.  I don't know how they can make money off mobile data services, in light of these issues and market dynamics.
There are two ways for mobile data carriers to make money off smart phones and similar gadgets:
1.  Early termination fees (we've previously commented about that)
2.  Tiered pricing for mobile data users.  Here is what AT&T just announced for that:
AT&T Mobility (NYSE:T) this morning made the nation's first definitive step toward tiered data pricing by instituting usage limits on what were previously unlimited smartphone data plans. Executives from the nation's largest carriers have long discussed a move toward tiered, bucketed data pricing scenarios for smartphones, but AT&T is the first major U.S. carrier to implement the changes.
Perhaps not surprisingly, the changes will go into effect June 7–the same day Apple (NASDAQ:AAPL) CEO Steve Jobs is widely expected to unveil the company's next iPhone.
Here's how AT&T's new plans break down:
DataPlus: Provides 200 MB of data for $15 per month. If customers exceed 200 MB, they can purchase an additional 200 MB for $15. AT&T said 65 percent of its smartphone customers use less than 200 MB of data per month on average.
DataPro: Provides 2 GB of data for $25 per month. If customers exceed 2 GB, they can purchase an additional 1 GB of data for $10. AT&T said 98 percent of its smartphone customers use less than 2 GB of data a month on average.
Tethering: Smartphone customers–including iPhone customers–with the DataPro plan will have the option to add tethering for an additional $20 per month. Tethering for iPhones will be available when Apple releases iPhone OS 4 this summer, AT&T said.
The plans stand as a stark refutation of AT&T's previous pricing–which were in line with much of the rest of the domestic and international wireless industry–offering unlimited data access for a flat $30 per month. That the carrier has reversed course likely is a reflection of the dramatic increases in data traffic on AT&T's network, primarily generated by iPhone users. AT&T's new data plans serve the dual purpose of preventing excessive use while rewarding light data users with cheaper prices.
"While the convenience, simplicity and peace of mind that comes with an unlimited plan helps to drive adoption and reduces customer care costs, it is also unsustainable," wrote analyst Roger Entner of The Nielsen Company. "It certainly has driven adoption through predictable pricing, but with a long-term downside risk to the overall business model and the financial viability of the entire industry. … By lowering the data component of smartphone plans, among them the iPhone, they [AT&T] are stimulating demand, just like the shift from unsubsidized iPhone pricing to subsidized iPhone pricing drove adoption."


Very well written article with lots of to the point content.  Many of the points mentioned were very provocative and novel, e.g. "a smart phone is really a dumb phone."  But once you think about it for awhiile, you get the messages.  Great job in organizing and writing this detailed meeting summary

Great article!  Very well written with lots of take aways.
I plan to attend the June 24 ComSoc-TiE workshop on Mobile Apps

Thanks for a terrific article
I will attend the June 24 ComSoc-TiE workshop on Mobile Apps

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