Friday, June 4, 2010

Cell phone data plans

How much is it worth to get access to the internet on your cell phone? Right now I pay about $30 a month for a high speed internet connection (6mbps) and it has a nice low latency (around 50ms ping to google). Now this is a wired connection so I am only able to take advantage of it while I'm at my house. Also I personally believe that I should only be paying $20 a month for that connection and that I'm being overcharged.

If I could get the same quality of connection everywhere I could see that as an increase of value. I'd probably be willing to pay an extra $10 a month for access elsewhere even though I would very rarely make use of it. One way to get this is to add a data plan to my cell phone. There are a lot of issues with cell phone data plans. First the connection is not anywhere near as good as my wired connection. I may be able to get the same or similar bandwidth, but the latency is much much worse (most people I've talked to report on the order of 300ms ping or higher). Next, cell phone data plans seem to be moving towards only offering limited bandwidth.

There are three main reasons that I would like to be able to have internet access anywhere I go. First is simply browsing websites. Any well designed website with primarily textual content should be fine with reasonably limited internet bandwidth and latency. The trouble is that many websites have way more graphical, audio, and plugin based content and that requires much higher bandwidth, but latency is not really an issue.

Second, I would like to be able to play online games. Most online games require fairly low bandwidth but absolutely depend on low latency for a smooth gaming experience. The horrible latency of cell data networks basically makes this an impossibility.

Third is streaming online videos. When you start to watch a video online you don't really mind so much if the video takes a while to start up. What you absolutely need is a good amount of bandwidth. And you want your video to look good on whatever screen you are watching it on.

I believe that cell phone data is only actually effective for the first kind of web use since that will easily remain within the bandwidth limits and does not require a low latency connection.

Now on to the issue of tethering. If a phone has the capability to connect to a cell phone data network and a wifi network at the same time then it has the capability to share the cell phone data with any wifi enabled device. There is no value added by allowing your device to do what it can already do. However you are still stuck with the same limited bandwidth restrictions and poor latency. If a cell phone service provider would like to have a reason to charge for tethering they should at least include a much better network connection with the increased cost (which should be no more than $10). There needs to either be a lower latency connection to allow you to do some low bandwidth gaming, a much higher bandwidth limit to allow for streaming of higher quality videos that will look good on your screen, or both.

If I could propose a pricing scheme that I'd be willing to support and pay for it would be as follows:
  • $10 - basic data connection with a low bandwidth limit for people that only intend to use their data connection on their phone. Consumers should be notified that this connection will be severely limited so that they know what they are getting in to.
  • $20 - higher quality data connection with a higher bandwidth limit for people that want to be able to stream videos. Tethering should at least be enabled for this tier as the bandwidth would allow some amount of streaming to a larger screen. Consumers should once again be made aware of the limitations of this plan.
  • $30 - highest quality data connection. This should have a very high bandwidth limit or perhaps be an unlimited plan. In addition, wherever possible, these users should be able to have a low latency connection to enable real-time multiplayer gaming through this data connection. This would be the connection I would want and happily pay for.
For my own reference I am adding a list of similar plans from the big 4 phone companies in the US that I might be interested in:

Sprint: $70 – 450 + unlimited + unlimited
T-Mobile: $80 – 500 + unlimited + unlimited
AT&T: $85 – 450 + 2 GB + unlimited
Verizon: $90 – 450 + unlimited + unlimited