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Wireless Firms Weigh Metered Pricing

Tiered plans pushed to ease strain on mobile networks as data traffic grows, finds survey of mobile company executives.



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Most international mobile phone executives believe pricing will move toward tiered and metered plans in the coming months and years, according to a new poll of mobile execs in 55 nations.

In the United States, the metered pricing ice was broken in June by AT&T just days before Apple unveiled its new iPhone. Metered pricing is also common in some European countries and it is showing up in USB modem plans offered by carriers including Verizon Wireless and Virgin Mobile.

The survey, released this week by international law firm Freshfields Bruckhaus Deringer, found the international mobile landscape differing in mature markets in industrialized countries from less developed countries, where mobile access is still relatively new. According to 55% of the surveyed executives, tiered pricing is coming to mature markets while 78% of mobile operators in developing markets believe that voice and data pricing are still more likely to be used in their markets.

"With pricing positioned firmly at the heart of the solution to the mobile industry's challenges," said Natasha Good, co-head of Freshfields' mobile group, "questions remain over whether consumers will be easily weaned off flat-rate data tariffs and how long mobile operators can stave off the need for investment in new technologies and infrastructure to maintain quality levels for a new breed of data-hungry consumer."

In the United States, Federal Communications Commission chairman Julius Genachowski has warned of a coming "spectrum crisis" as smartphones and other devices increasingly clog carriers' networks. The FCC has suggested some solutions -- greater use of Wi-Fi unlicensed spectrum, more femtocells, and a more efficient re-arrangement of cell towers. It won't be enough, however, to keep all spectrum bands open.

Most of the executives in the survey said they believe pricing arrangements will solve or mitigate strain on the networks even as data traffic grows.

At the same time, carriers and equipment providers will seek to walk a fine line between developing new and innovative mobile solutions and managing funding for them.

"There are clear signs of a shift in industry practice towards greater collaboration," said Good. "To maintain profitability, avoid being categorized as just a 'dumb pipe,' and make customers 'sticky,' network operators will look to join forces with content providers and application developers."

The Freshfields survey also found that nearly 20% of the polled execs say an accelerated development of next-generation networks is high on their agendas. In the North America, most carriers are moving to LTE and HSPA+ in a move to handle more data more efficiently.