Wednesday, December 7, 2011

Family Data Plans are Coming

Verizon Wireless expects to offer family data plans “sometime in 2012,” says  Verizon Communications CEO Lowell McAdam. 

The long-awaited move should have roughly the same impact on mobile broadband adoption as family plans for voice and texting have had on mobile adoption, namely drive mobile broadband usage and accounts very high, over a relatively short period. Family data plans coming

Family plans for voice and data were a major factor in driving widespread adoption of mobile devices in entire households, and family data plans are fully expected to spur adoption of smart phones and data plan usage.

In 2003, family plans accounted for less than 10 percent of the U.S. market, where by 2007 they accounted for 41 percent of adult mobile subscriptions, and 56 percent of new activations. Family plans revolutionize the market

In 2005, researchers at the Yankee Group noted that “family plans have been the main driver of teen cell phone adoption during the past few years. Family plans drive teen mobile adoption

As recently as 2007, 71 percent of all family plans involved only two lines, while Ericsson Business Consulting suggested at the time that nearly 60 percent of family plan accounts, the master account holder is using 75 percent or more of the monthly bucket minutes. Impact of family plans

Contrast that with the situation late in 2011, when the heaviest usage is probably not on a parent’s line, but on the teen and young adult devices. That would be true both for voice as well as text messaging. In many families, it was children who got parents using text messaging, which were, pre-2007, “data services,” as mobile broadband had not begun to be adopted on a wide scale.

Most observers also would say that family plans drove text messaging adoption and contributed to lower churn, as well.

A study by Strategy Analytics suggests that 60 percent of smart phone owners want a single, shared data plan to connect multiple devices like tablets, smartphones and laptops. About
50 percent of smart phone owners are interested in connecting multiple devices through tethering to their smart phone and 40 percent have an interest in a standalone 3G portable WiFi router (like the MiFi from Novatel Wireless) to connect all their devices. Consumers want family data plans

Executives at AT&T and Sprint also have been talking about the changes for years, and it appears the plans finally will be offered. Though it appears specific policies are not yet fully worked out, the plans will encourage purchases of smart phones and data usage across a range of devices on a single account. Policies not set yet

"I think in 2012 we will see it," McAdam said. UBS webcast

At the moment, not that many service providers offer family data plans, and most plans are not the robust plans we typically see in the U.S. market for texting and voice.

Since the spring of 2011, Orange has been offering two devices per data plan, bundling 600 minutes, unlimited texts, unlimited BTZone WiFi access, and 2 GBytes of  shared data across for iPad and iPhone users, for example, with a cost of £99 a month for 16 GByte plans, according to Infonetics Research.

Typical U.S. family plans might allow as many as five devices to share texting and voice buckets. The number of devices presumably would be greater, to include tablets and tethering, for example, once the major U.S. carriers start to introduce the new plans. .

Vodafone Ireland offers shared mobile broadband for business users with a 5GB limit, shared across however many users is required, for a fee of €7.50 per connection per month, with each additional increment of 5GB being another €10.

Optus offers a plan connecting five users each on a 4 GByte shared plan, with 20 GBytes of data pooled between those five users each month.

Infonetics forecasts that approximately 15 percent of all smart phones (with some regional variation) will be sold as part of a shared data plan by 2015. Likewise, 15 percent of tablets will be sold as part of such a plan by 2015, and that percentage will continue to grow beyond this point, according to Shira Levine, Infonetics Research directing analyst, and Richard Webb, Infonetics directing analyst. Family data plans set to grow

Infonetics forecasts for penetration of family data plans likely will be revised upwards once the U.S. service providers start to introduce the new plans. As family voice plans made feasible use of mobiles by children and teen-agers, so family data plans will expand mobile data usage from a couple of devices, or a few devices in a household to allowing every device to be a smart phone, plus encouraging users to buy network-capable tablets and e-readers.

To the extent that mobile service providers wish to encourage network use by tablet devices, the family plans will be the key enabler of more-rapid adoption.

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