Mobile Service Prices Trending Downward

Unstrung covers a couple of recent reports that predicts a "downward trend in prices for wireless services -- including voice, data, and email -- accelerating over the next 12 to 18 months." One of the reports covered is a market study from In-Stat that "finds that small and medium-sized business, in particular, are seeing prices for wireless services fall."

Charles Gerlach at In-Stat noted larger enterprises are "often locked into long-term contracts, and unable to track usage as precisely as smaller businesses, large enterprises so far have been unable to take advantage of falling prices and new, more flexible payment plans."

He said, "Many large organizations are paying monthly charges for at least some employees who don’t use their phones or are not even employed there anymore."

The article states that "while revenue per user (RPU) has been falling for sometime for cellular voice service on the consumer side, carriers have been able to keep prices relatively flat on the enterprise side. That is no longer the case, particularly as enterprises shift to voice-over-IP and data services become more important and widespread."

Tole Hart at Gartner said, "Voice RPUs are going down so [carriers] have to find additional data revenue. They're trying to figure out a way to do that, and that's really the challenge."

However average revenues for data services is also falling. Craig Mathias at the Farpoint Group said, "The data pricing trend is downward. We're expecting unlimited wireless broadband services in the $35-$45 range in the next year or so. There will always be a premium for wireless, but the objective is to get to the same price point as wired."

In-Stat's Gerlach added, "We see evidence that large organizations are becoming more aggressive at seeking to understand and control their spending on wireless services, and we believe that this is likely to lead to some pressure to reduce the rates that they are paying."

Dualmode WiFi/cellular handsets with seamless handoff between Wi-Fi and cellular networks will also be a factor. FarPoint's Mathias said, "WiFi, of course, is terribly inexpensive to deploy, so that will have a downward effect as well."