Reader Forum: For tablets, all data is not created equal

Editor’s Note: Welcome to our weekly Reader Forum section. In an attempt to broaden our interaction with our readers we have created this forum for those with something meaningful to say to the wireless industry. We want to keep this as open as possible, but maintain some editorial control so as to keep it free of commercials or attacks. Please send along submissions for this section to our editors at:[email protected]@rcrwireless.com.
The age of the tablet is here, and there is no denying it’s changing the way we do, well, almost everything. There are some incredible use cases for tablets in retail, business and even life-changing scenarios like helping an autistic child communicate. It’s clear that tablets are more than just another consumer device and have a broad appeal.
Research of the tablet market has shown staggering projections – reports have stated that up to 200 million tablets could be sold annually by 2014, and the level of growth is five times that of PCs and four times that of smart phones. The Federal Aviation Administration has even approved iPads for use as an alternative to paper charts for pilots! J.P. Morgan estimates that in 2010, tablet-related cannibalization of PCs was somewhere around 18.9% – and this could potentially double in the next two years.
No matter if we’re discussing the iPad 2 or another brand of tablet, there is one thing in common – tablets are data-intensive machines. As more tablets become available for use in different scenarios, the question of pricing plans will arise again and unlimited plans are not going to be the answer. Tiered pricing is making headway as the approach of choice as of late, whether it’s quota-based (GB), speed-based (Mbps), or any combination of the two. But here’s the thing – neither quota nor speed are intuitive measurements for a person using the tablet and users are unsure how much data they are actually using.
Service providers need to start thinking about a new approach known as value-based pricing, where price is determined based on the perceived value seen by the customer. There are so many different options present here – from the heavy e-mail user, to the music downloader – to offer an optimal rate plan based on usage and consumption behaviors. Behind the scenes, service providers will still need all the advanced pricing schemes to move away from unlimited data gridlock, but the outcome communicated to the customer should be simple and intuitive to understand.
Here’s an example. Let’s say you survive your commute by streaming episodes of “Mad Men” you may have missed to your tablet. Instead of having to figure out how much data an episode takes up, what if service providers offer a ten-episode “data deal” with all the prerequisites, such as data quotas and speed, already included? Customers won’t have to worry about going over their allotted data and can just sit back and relax.
These types of customized plans can work for your business “road warrior” by offering unlimited e-mails, but charging for anything additional (like streaming video, etc.). Teachers could buy something like a “lesson plan pack” that allows them to use specific educational apps in the classroom, while charging per megabyte for anything additional, like e-mail or Internet.
Another aspect that service providers need to keep in mind is how the influx of data coming from tablets will have on their networks and overall customer experience. Mobile traffic from tablets is projected to grow 205 fold by 2015, and this will no doubt cause additional strain on networks during peak usage hours.
In order to deal with this “capacity crunch,” expanding existing capacity is a key strategy, but does not solve long-term problems of ever-increasing demand of connected devices. Alternative techniques to deal with this issue include data offload, traffic shaping and the value-based pricing discussed above, which will be vital moving forward.
You cannot have an evolution of an industry without making some vital tweaks in the back-end, both from a consumer and network perspective. This is just the beginning of where tablets will lead us and service providers have to be ready for this fundamental shift to a “post-PC” world by embracing value-based pricing.