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September 16, 2004

Operators May Get Burned on Flat Rate 3G

By Nancy Gohring

Researchers at Analysys say that cellular operators should resist offering flat rate pricing for 3G access: They say that such pricing schemes aim to compete with DSL or Wi-Fi services but that the end result will be heavy Internet traffic on the 3G networks. Instead, operators should focus on valuable services that can be delivered to cell phones which they can charge more money for.

Cellular operators certainly didn’t envision the existence of Wi-Fi when they first jumped into 3G. With plenty of hotspots available in most cities, users may decide to go the extra mile to find a hotspot rather than use an expensive 3G service, which may be why cellular operators feel compelled to at least mimic the flat-rate pricing of some Wi-Fi access plans.

T-Mobile is in a particularly good position, offering both cellular and plenty of hotspots. When it recently introduced an HP iPaq that includes both Wi-Fi and cellular, it planned to introduce a flat rate fee that includes both GPRS and Wi-Fi. It’s a good way for T-Mobile to hedge in the hopes that heavy data use travels over the Wi-Fi network and lighter, on-the-move access happens on the GPRS network.

Posted by nancyg at September 16, 2004 10:02 AM

Categories: Cellular

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