Study: unlimited 3G mixed blessing for carriers
updated 12:35 pm EDT, Fri April 11, 2008
ABI on 3G Cell Strain
Unlimited cellular plans, and particularly data plans, are liable to create severe pressure on the providers that host them even as the make new features available, says a new study from ABI Research. Analysts at the group warn that the promise to carriers of new subscribers through mostly or completely unlimited plans from AT&T, Sprint, T-Mobile, and Verizon may be offset by the need to support very likely spikes in network traffic. Providers are likely to spend extra to make sure their networks can handle the load, ABI says.
The researchers point to real-world examples KTF and SK Telecom in Korea, which are reportedly encountering "degraded" calling as two-way video calls and roaming agreements across much of the world choke the data available for voice. The Korean situation is not expected to be universal, however, as the country depends almost exclusively on 3G for both calls and data. Most European and North American carriers use a separate GSM band for calling and basic data.
ABI further notes that unlimited access allows Internet habits that haven't previously been realistic with cellphones, creating an advantage for customers but potential problems with the network. Full-feature web browsing, video streams, and media uploads will be useful to customers but are the most likely features to create problems. Customers may actually be more likely to leave a given service if the strain affects their calls or data use, according to the report, which also notes that messaging is likely to climb upwards if an unlimited term is part of the contract.
Spam is more likely to surface when bulk advertising companies no longer have to pay in batches for content or else worry about a hostile reaction from customers charged for incoming messages.
The news comes as AT&T is in the midst of a major expansion of 3G service across the US, which it hopes will cover all major areas by the end of 2008 and will usually supply much higher speeds to customers through the choice of an full HSPA network, which increases the usable speed both for downloads and upstream.
Fresh-Faced Recruit
Joined: May 2003
Not a problem
I don't really seeing it being a problem. The only carrier offering a TRUE unlimited $99 plan is Sprint. They are losing a ton of customers so they have room for the increased traffic. The carrier more likely to be bogged down with traffic--AT&T due to the iPhone--is only offering unlimited VOICE calls for $99. That's it.