Carriers Still Don’t Know How To Implement iPhone Shared Family Data Plans

Carriers Still Don’t Know How To Implement iPhone Shared Family Data Plans

Despite the call for shared data plans, no one knows for sure the impact they'll have

The concept of shared data plans has been floating around in the U.S. mobile industry for a while.  So far, however, only Verizon has announced plans to offer them. This idea of shared data plans is based on the various family and business plans available from almost all major carriers in which multiple lines and corresponding devices are bundled as a single plan on a single account. That allows all the devices share the same pool of minutes.

While it seems like shared data would function in a similar manner, the issue isn’t quite so clear-cut from the perspective of mobile carriers. In fact, according to AT&T CFO John Stephens, carriers still aren’t sure how to configure shared data options or how much money they would make or lose by implementing them.

Speaking at the Nomura U.S. Media and Telecom Summit, Stephens talked about the uncertainty of shared data plans. The biggest uncertainty is how they will effect customer behavior and thus company revenues. As a result, he said that wireless carriers aren’t certain how to position or orchestrate shared data options.

Shared voice plans have a predictable effect in the U.S. mobile market. They lead to a slight decrease in revenue compared two or three family members having individual plans (whether under a single account or under separate accounts for each person). However, they also encourage families to purchase more devices. That adds additional monthly fees, can bump the overall number of minutes and texts purchased, and can lead to overages. Put together, that means that shared voice plans increase revenue overall.

The same impact is far from certain for shared data plans.

For one thing, shared data plans will be attractive to individuals as well as to families. A single person could consolidate several devices into a single data bucket like an iPhone and iPad or mobile hotspot. Provided they didn’t exceed the shared plan, the effect would be the same as canceling an account and the carrier would lose a decent amount of revenue.

The situation with multiple users and multiple devices is even more complex because of the number and variety of devices added to the mix. A family of four might combine plans for four iPhones, two, iPads, a mobile hotspot and other devices. That could effectively be the same as killing multiple accounts without delivering additional revenue, particularly for devices that are bought and paid in full like the iPad rather than be being subsidized and thus under contract. On the other, if multiple devices are subsidized, carrier’s might recoup more over the long run.

There’s also the very real possibility of data overages in a scenario involving multiple family members that each have more than one device. Managing a pool of data across multiple users and multiple devices will be a lot more complicated than managing minutes or texts. That could be a significant revenue stream. However, that raises issues of carrier reputation and even potential regulation to curb shared data bill shock.

All this complexity and uncertainty explains why carriers have tried to avoid a shared data model. Even Verizon, which will be launching shared data options this summer, hasn’t said how the plans will function. Verizon’s effort, however it turns out, will at least lead to practical information about how consumers view shared data plans and how they impact carriers. That should embolden other carriers, particularly if Verizon’s experience offers useful lessons of what works and what doesn’t.

  • lausley

    The carriers will obviously lose some of their windfall monopolistic profit on this move and are obviously being forced to do it because of market pressure and customer demand (Yay customers!). 

    It doesn’t surprise me in the least that AT&T would say that they “aren’t sure how to…(fill in the blank)”. They can’t even figure out how to get my DSL and wireless accounts onto the same account and can’t seem to keep any records of all of the problem history I’ve had with both accounts. Verizon is making a risky move that may cost them a little short-term revenue in the almost obvious belief that this customer-benefitting move will lead to a larger long-term committed customer base (does anyone remember a guy named Steve Jobs that took a similar approach at this little company called Apple?)

    I’d dump my AT&T accounts at the drop of a hat once I’m no longer shackled to any of their products. I’ll reward consumer-benefitting moves like Verizon is trying to make and vote with my wallet.
  • FriarNurgle

    I’d speculate the Family/Shared Data plans would be around a 10$ per extra line savings for a tad less GB allowance. Thats if it actually happens. The carriers have no real incentive to change. Possible AT&T might try and roll it out to help decrease the exodus that will occur if the “new” iPhone is LTE. 

  • Brandon Dillon

    I’m sure there will probably be some kind of bs catch to it once it is implemented. They are holding on to their precious data revenue with a death grip, since that’s probably their biggest money maker. They’ve been fucking their customers with data costs for too long.

    I couldn’t even begin to explain how sweet it felt to read the article about the AT&T (CEO?) losing sleep over iMessage. His tears were delicious.

About the author

Ryan FaasRyan Faas is a technology journalist and consultant living in upstate New York who has written extensively about Apple, business and enterprise IT, and the mobile industry. In addition to writing for Cult of Mac, he is a contributor to Computerworld, InformIT, and Peachpit Press. In a previous existence he was a healthcare IT director as well as a systems and network administrator. Follow Ryan on Twitter and Google +

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