||Changes in Service Plans Are Impacting the Cellular Business
Imagine for a moment Gordon Gekko from the movie Wall Street, standing on the beach at dawn in his bathrobe, calling in trades in Asia with what now would qualify for inclusion in the cell phone Hall of Fame.
In 1987, the Motorola device Michael Douglas was holding cost $4,000 and was considered cutting edge. Today, a mere 25 years later, it is downright laughable.
While changes and advances in technology will always be a part of the personal communication device business, some industry watchers are saying the next big wave of change won't be about a hot new gadget, but rather sleek new service plans.
"The changes that are happening in cellular price plans are really dynamic right now," says Bill Menezes, principal mobile phone industry analyst at Gartner Research. "Part of it has to do with the contract, but part of it also has to do with the fact that more and more of what people are buying right now is mobile data."
Not only does he expect to see competitive packages developed by AT&T and Verizon Wireless that will acknowledge the no-contract plans now being offered at T-Mobile, but he expects to see the unlimited data plans head to the graveyard.
"The unlimited plans that were so popular at all the carriers a couple years ago, those are going the way of the dodo," Menezes says. "The companies just can't afford to offer them anymore."
Even so-called unlimited plans are often only unlimited up to a point and typically keep the amount of high speed data that can be used under tight wraps. Even T-Mobile's "Simple Choice Plan," which has no contract and costs $50 a month, includes just 500 megabytes of data. After that is used up, your smartphone gets effectively moved into the slow lane for the remainder of the month.
While T-Mobile's no-contract plans boast that "you don't have to serve a two-year sentence," there are lots of restrictions and other considerations, including phone compatibility, access to their network, whether or not you already have a phone, or if you want to bundle in other devices or family members. Connectivity, or the quality of service, is also a factor.
For its part, AT&T calls its plans the "fairest and most flexible" and offers an a la carte menu that allows subscribers to pick how much talk time, texting and data they need. Verizon Wireless touts its "best network" and offers both prepaid and "share everything" plans that can accommodate up to ten devices. No matter which plan you use, be prepared to pay from 6% to 28% per month in different taxes, too, thereby driving the annual cost to well over $1,000.
Speaking of affordability, Gartner's Menezes also points out the emergence of a trend he calls B-Y-O-D, or "Bring Your Own Device." It's something that he says will see more companies giving up on issuing so-called work phones, and instead working out a deal (and the logistics) that allows employees to chose and use their own device.
"Interestingly enough, employee desires are what is driving this phenomenon," he says, noting that companies are also open to the idea since it is "moving more of the cost of the cell phone and the service over to the employee."
(Source: Yahoo! Finance, 06/21/13)