Thanks for your continued interest in The Sunday Brief. Between the RCR posts and your continued referrals to this website, we saw over 10,000 unique readers last week. That’s pretty good for a boring telecom blog.
Many of you have asked me to write on the new data plan prices. In the attached article, I explain the overall economics of data (which is largely misunderstood by most non-telecom folks), and talk about the margin implications to the wireless operators. While many of you will question my cost assumptions (which may be a bit rusty), the point is that the threshold (gross) margin is 50% or so on a product with minimal billing, (direct) marketing and customer service costs. Data, and specifically 4G data, is the new cash cow. It’s hugely profitable for the low end (casual) plans, and with a “breakage” assumption, enormously profitable at the high end plans.
As a former telecom exec turned low-latency applications developer, the “rationing” concept is a whammy. So many applications are based on a “free” or “unlimited” concept. This is slowly being erased (and for good reason) by the carriers. What to do for a next chess move – more caches? Let’s start the conversation
Here’s this week’s Sunday Brief. Thanks again for your support, trackbacks, and referrals. I have also attached the table in the PDF below as a .png file – Jim
Accompanying data table:
