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May 3, 2012updated 23 Aug 2016 2:51pm

Mobile operators need to embrace multi-device data plans

Rather than attaching data plans to a single device, mobile operators need to develop new data offerings to match the boom in multiple device ownership, such as iPads and other cellular devices.

By Allan Swann

Multi-device data rate plans will be a key driving factor in the expansion of data revenue for mobile operators, claims Gartner Research.

It estimates that data revenues will double by 2015. In the US alone it will go from $81.4bn to $151.6bn in just 3 years time.

"Historically, communications service providers have strictly been focused on individual data plans. Now the U.S. data plan market is set to begin its first real transformation, with data plans poised to evolve from plans tied to an individual device to plans that share a specified amount of data between multiple devices," said Gartner’s Hugues de la Vergne.

Lowering churn, that is customers leaving the network versus those joining, is a critical problem for operators who are struggling to differentiate. They mostly compete on price alone, with wafer thin operating margins.

The key is to make sure devices remain connected to operators’ networks, and not on alternatives, such as wi-fi, as customers will demand 24/7 access to their data – no matter where they are geographically.

"With personal cloud services moving to the forefront in 2012, cellular connectivity will be more important, as end users will want to be able to access their content at all times as opposed to just when they are in Wi-Fi areas," Mr. de la Vergne said.

"Data revenue is expected to expand to become 65 percent of total U.S. wireless service revenue as voice declines to 35 percent in 2106. Driving the explosion of mobile data will be the increase in demand for mobile video content, which will drive sales of larger-screen devices, such as media tablets."

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The launch of multi-device data plans will also be a driver for the increase in sales of mobile network enabled devices in general, including smartphones, which Gartner estimates will sell 311.7 million units in 2016.

Device vendors are increasingly concerned by the threat of commoditization – that is, being reduced to a utility provider, similar to an electricity company or water supplier. This kind of innovation in billing practices and bundling can help ease the high level of competition in the market.

Bergne believes that by having multiple mobile devices, with different replacement cycles means that the end user is less likely to churn away, as opposed to a subscriber with just a mobile phone.

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