Sharing Is A Good, But Complicated Thing

AT&T has joined Verizon Wireless in offering a shared data plan option for its customers. Not surprisingly, the plan is similar in nature, based on the premise that the voice and messaging minutes should be unlimited, while the data component is offered in various buckets (1GB for $40 scaling up to 20 GB for $200). But are these plans simplifying the purchase experience or further complicating it?

AT&T’s “twist” on the Verizon theme is to offer a sliding scale of cost for smartphone users, depending upon the amount of data that is purchased. So a consumer looking for an entry level data plan (1GB) will pay $40 for the 1GB, and $45 for the smartphone addition (which covers the voice and messaging). However, an upgrade up to 10 GB of data would mean that attaching the smartphone now costs $30 per month, not $45.

The plan looks to be designed on the assumption of scale: no single user will require 10 GB of data and therefore the $15 saving per smartphone is more designed to provide a benefit for adding multiple smartphones (a type of “bulk” discount). But mere mortals may looks at it, scratch their heads and wonder why a customer with a high data need is paying less for the somewhat unrelated voice and messaging side. Further, this does make the math more interesting as a consumer considers upgrading – or downgrading – their data use at a later date.

In fairness to AT&T, it is not as though they have taken a simple model and complicated it. As a family of five, my mobile needs often leave me scratching my head with regards to the charges: voice minutes, which can vary wildly depending on the social life of my kids, messaging that is shared across all of us (and is unlimited), data plans per person and – of course – the occasional overage or international message. As such, the new plans are no more complicated, just different. I should also point out that AT&T has not removed its existing plans – if the new option is too complex, consumers can simply remain with the status quo.

In addition, when it comes to the voice/messaging side, does a consumer really understand why a smartphone costs more to connect than a flip phone? Isn’t a standard phone user more likely to use voice minutes than a smartphone user who is more focused on Temple Run and Angry Birds? This varying cost has more to do with the various subsidy rates that the carriers cannot (easily) extricate themselves from, but which consumers fail to consider.

Two smaller carriers remain sitting on the sidelines, watching the mobile share plan progress. If the plans do resonate, we expect to see at least one of them join the fray in the next six months. But there is also something to be said for Sprint’s current philosophy of “Simply Everything.” Compare trying to understand the above to a plan that is unlimited “everything” for $109. The sales pitch in retail stores is far easier, and the support calls after the first bill far fewer. Of course, the Sprint model does not scale as well, with essentially a “shared nothing” approach to the plans.

Will AT&T and Verizon succeed with the new approach? Of course: shared plans are definitely a major consumer need. But let’s hope that when the sales rep is explaining it all, that there’s an app for that too.