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Tiered pricing for mobile internet ‘inevitable'

A UK consultancy is predicting that tiered pricing plans for mobile internet are inevitable.

The dramatic increase of mobile data and especially video is expected to rise in the future and will mean that people will be spending more on their mobile phones.

By 2015, US mobile consumers are expected to consume 327,000 terabytes of mobile data a month, rising at a compound annual growth rate of more than 117 per cent, according to Coda Research Consultancy, which released the 87-page report.

At the core of this massive growth is mobile video, in 2015, video will consist of 224,000 terabytes of data a month, representing a compound annual growth rate of 138%. The number of mobile video users is also expected to rise by 34% annually to reach 95 million in 2015.

Steve Smith, co-founder of Coda, said carriers will cope by offering different rate plans for different levels of consumption. In a release, he said: "Flat-rate pricing has helped drive mobile internet adoption, but we envisage that as smartphone penetration rises and as carriers roll out 4G, carriers will have to move toward tiered pricing."

Coda said that peak capacity is not as much the main concern as general capacity – which makes it even more scarier because that means the networks could be tapped out all the time, not just at big events, like a conference or baseball game. "As carrier networks now stand, network utilization will reach 100% in 2012 during peak times," Coda said. At that same time, smartphone penetration will reach 40% in the US.

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