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Why Unlimited Mobile Voice Means Higher ARPU For Carriers

Mushroom CloudIf you haven’t been following the various tech blogs over the past 24 hours or so, you’ve missed out on the announcements about Verizon, AT&T, and T-Mobile all offering “unlimited voice calling” for $100 a month. T-Mobile, with it’s decidedly weaker network, upped the ante by including text and MMS messages in that price. Data in all cases is extra. (Sprint announced an all-you-can-eat plan a while ago for $120, but it includes SMS and data)

While this sounds like a good deal, consider the rate plan you’re on now. Is your rate plan less than $100 a month? Are you using all the minutes you’re paying for?

Granted, there will be a class of users where this rate plan will make sense–the road warriors who basically live on their mobile phones. However, I suspect that’s a minority of users. I also suspect that generally speaking, there is enough margin in $100 a month to cover the vast majority of these high-usage users.

Where I suspect the increased average revenue per unit (ARPU) will come from is those people with sub $100 plans who either ditch their landline or simply upgrade to this new unlimited plan to normalize their wireless costs. The reason you subscribe to an unlimited plan is exactly that–cost normalization. You know what your service is going to cost each month and you don’t have to worry about how much you use it.

One thing is for sure with these unlimited plans: extra lines won’t be $10 a month like they are now. Extra lines will be more expensive, which will also increase ARPU. I suspect as the price war continues, this, along with the base price, will drop.

Photo from Michael Roper

#Cybersecurity Evangelist, Podcaster, #noagenda Producer, Frequenter of shiny metal tubes, Expressor of personal opinions, and of course, a coffee achiever.