So it’s been a few days since Google announced the Nexus One. As I have said in earlier posts, from a hardware perspective it’s a very nice phone. In my view, though, the real story continues to be the rapid evolution of Android and its potential impact on the wireless industry. And in the case of the Nexus One on T-Mobile, the price of the data plan. #
The wireless telephony industry is on the cusp of a massive architectural change. Ten years ago residential Voice over IP telephony didn’t exist; today, while calls originating on a PC using Skype may still terminate on an analog phone, but the FCC is actively planning for a day when ‘dial tone’ and ‘Plain Old Telephone Service’ no longer exist. #
This change will include wireless circuit-switched voice networks – your mobile phone will be ‘data-only’ just as your Vonage or Comcast phone, or your Skype account, are. In such an environment, where your ‘telephone number’ no longer corresponds to a single piece of hardware, and may even be a name, wireless service providers face the challenge of keeping their customers’ loyalty without contracts and early termination fees. Google Voice may not use your smartphone’s data connection for voice calls today, but the capability is the obvious next step. And it has a direct impact on your wireless carrier’s ARPU (average revenue per user). If your phone will make calls on an unlimited data plan, you don’t need ‘minutes.’ #
T-Mobile’s data plan prices are rising to deal with this eventuality. 3 years ago, T-Mobile’s data plan was $19/mo. When the Android G1 debuted, the data plan cost $24.99 – $29.99. Now, to get a subsidized Nexus One, you’ll pay $39.99/mo. During that same time, T-Mobile has morphed from being a carrier that competed primarily for urban customers on price to a robust carrier with HSPA throught its much-expanded coverage area. Customer surveys consistently show that TMO is now no. 2 in network quality to Verizon Wireless, and better than Sprint and AT&T. #
A world in which the next iPhone isn’t exclusive to one carrier, my phone number isn’t tied to a carrier, and I can get a month-to-month data-only service plan, will be an interesting one indeed. For both the customer, and the carrier. #
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