Wireless Data Currently About Ubiquity, Not Speed

from the nice-one dept

We've already joked about how all wireless data services, no matter how fast, start their pricing at $80/month, in the hopes that business users with expense accounts will sign up while the network provider works out all their network and capacity problems. The prices eventually drop as the provider feels better about the network and (much more importantly) competitors have launched their own, faster, networks also at the $80 price point. Still, in an interview about wireless data offerings, the co-CEO of wireless data company Seven, provides an interesting rationale for the $80 pricing. He basically admits that it's too expensive for the power user, but just fine for the casual user. Seems a bit counter-intuitive, doesn't it? The power user, of course, is also a bandwidth hog -- and the carriers don't want bandwidth hogs clogging up these networks, so no matter what the price, the speeds of most wireless data service offerings aren't enough. However, for the more casual user, bandwidth isn't nearly as big an issue. For the casual user signing up for wireless data plans, the issue is ubiquitous connectivity -- and that's the target audience for these users. So, the question being asked is the wrong one. The interviewer is basically asking how they can justify charging $80/month for "what amounts to a very slow DSL connection." The answer (though, not this directly) is basically that users are buying the ubiquity and the mobility -- not the speed.