Slate’s tech columnist recently suggested that AT&T Wireless (and presumably other wireless network service providers) move from an unlimited data plan to a tiered plan that rewards lower end users and punishes the heaviest users. Although the heavy users would end up paying more, the goal is actually not to extract the most money from customers, but to encourage them to reduce their usage, even at the cost of of lower per-user profit. United States wireless networks, like much of our infrastructure in most of the country, is under-developed and over-utilized, and groaning under the pressure. By providing financial incentives to users to monitor and restrain their use, the idea goes, network utilization would go down in the short term enough to keep the network stable, and there would be time for upgrades.
How would my plan work? I propose charging $10 a month for each 100 MB you upload or download on your phone, with a maximum of $40 per month. In other words, people who use 400 MB or more per month will pay $40 for their plan, or $10 more than they pay now. Everybody else will pay their current rate—or less, as little as $10 a month.
This is of course basically how the Japanese company Softbank bills for Internet utilization on their phones, including the iPhone. (I believe PCS companies like eMobile actually introduced unlimited usage plans first.) While their billing system works at a more granular level, the individual packet, the overall effect is similar. If you barely connect to the network that month, your basic network charges may come to around $10, with metered usage up to a cap of around ￥4000, or around US$40. Of course, since Japan has historically not offered unlimited data plans, the introduction of this billing system was in some ways received in the opposite way that it would be in the US. That is, Japanese wireless companies historically charged purely metered rates, while US providers have mostly offered unlimited plans. While the introduction of a tiered pricing system was considered a customer-friendly innovation in Japan, as it finally made it possible to use your wireless phone as much as you wanted without worrying about the bill, I wonder how Americans, so used to buffet-style pricing, would react.
In Japan, it’s 4,000 yen for a mere 5 Mb, which on an iPhone comes to about one moderately-sized web page per day. I wonder, is SoftBank’s network beginning to strain under the iPhone, as it is rumoured to have the poorest network of the three.
I’m not sure what you mean. The current plan, at least for iPhone but I believe for everything on Softbank, is that once you use around 4,000 yen worth of bandwidth for that month it becomes unlimited for the remainder of that month. My stats screen says I’ve downloaded 1.9GB and uploaded 225MB in the months I’ve had the phone so far, and my bill is always around 7000 yen.
My net service in Japan is the same as what Roy is describing. 2000 flat rate. Goes up to 6000 after something ridiculously small like 100 MB, but is unlimited after hitting the 6000 yen cap.
M-Bone, that sounds really expensive. The most I ever paid was 4,500 when I was living in suburban Yokohama and had to use DSL.
Ben, I think he means wireless. And actually 6,000/month is what I pay for my fiber connection. (Not counting all the discounts they gave me for the first year of service.)
Wireless. And I pay a bit more because I got the modem and a netbook “free” when I signed up. I’m pleased with the deal.
I’m using e-mobile and my bills are always about 6,000 a month and that includes DSL at home. I have the cheapest plan which is about 2,500 for something like 10mb and after that it increases to a maximum charge of 6,000 for the month. The unlimited plan is something like 5,000 a month. I’m thinking of changing to that and seeing if my bill goes down.
I was on their 1GB plan at first. While the monthly fee is small, if you go over it bites you. I had a 10,000 yen bill once.
The thing about the system used by DoCoMo, au, and SoftBank is that you only get away with paying the lowest amount (\1050) if you use no more than 10,000 packets, or 1.2 MB worth of data. For the iPhone, it’s about 1.6 MB or so. Great if all you do is send some email every month, but as soon as you start using i-mode, ezweb or SB Mobile, you hit the \4410 limit pretty quickly.
These all-you-can-transfer plans are basically a way for the mobile companies to get you to sign up for the plans by making them look cheaper than they really are. Having said that, it is still cheaper for most people to sign up rather than pay-as-you-go.
The prospect of a 6000 yen mobile bill was what scared me off the iphone in favor of the itouch. I am already paying for fiberoptic connection and cable tv at home so I figured I dont need constant internet connection. If necessary I can head to a McDonalds using the Wireless Gate service (I am still having some issues with that, but I will get to the bottom of this soon…)
Well, under normal usage patterns you are probably going to be in the upper pricing tiers, but having it drop down to a cheap level when you don’t use it is pretty handy for someone who does a lot of international travel, if you’re going to be out of Japan for most or all of an entire month. I was home for much of the summer and my electric bill when I got back was insanely low, but of course the fiber internet connection hadn’t changed at all.
I feel like a total baller here; I’m happier dropping four-figure sums to save myself time and hassle, and the iPhone pricing plans were actually a selling point for me. (But then I do a LOT of online reading on it.)
While I was back home in the US for a month this summer I was doing fine with a basic cell phone and an ipod touch (i.e. my iPhone with no service), as unprotected wifi is easy to find on the streets of Manhattan, Philadelphia or San Francisco, and pretty much all of my friends have a wireless router in their home that I can log onto while I’m there, but wifi is a lot less available in Japan, and would also be a lot less useful during those times I want to use the GPS/mapping program, which is a real time saver at times.
It took me a while to get my head around what went into the pricing on the cell phone plans, how each monthly bill is (usually) a sum of the pro-rated phone cost, voice minutes, and data packets.
I’m impressed by how easy they make it to reduce the plan you’re on if you’re not maxing out the usage. I took my bill to an Au shop and said it seemed kind of high, and they went through it and found things I didn’t need and knocked them off.
Just to clarify. 1 packet is 128 bytes. 1 megabyte has 7812.5 packets. The white plan basic data rate results at 1640 yen per megabyte. After the packet-flat-rate full discount, this drops to 656 yen per megabyte. If your cap is 5700 yen (5985 inc tax), then that is just under 9mb of usage before you max out your limit. In my case, my cap for the iphone is 4200 yen, or 6 mb. Basically Softbank is ripping people off by saying you can get away with 1000 yen per month if you don’t use your phone for data. You will hit the 1000 (1.5mb) after a few picture messages. My theory is that the network handles the data no problem, and they just use the capped fee to help pay off the subsidized price of the phone.
Right now, the 22nd of the month, my pre-discount total is just about 2 million yen (or $20,000). Ridiculous, yes. That’s only 250mb up and 1.3gb down. The big numbers also really help to confuse customers into thinking they’re getting a great deal.