A new survey of 1,000 young mobile users (18 to 34 years of age) provides more evidence of the changing value proposition mobile service (and arguably, fixed network service).
Visible surveyed more than 1,000 cell phone users aged 18-34 across the United States and found 78 percent of those users would rather have a service plan with unlimited data and no ability to make calls, compared to an unlimited calling plan with no internet access.
In practice, few, if any, consumers would actually want a mobile phone that did not make calls. The point is what the survey responses indicate about the relative value of the device, in terms of communication capabilities.
The likely more-important finding is that 74 percent of respondents would prefer to pay a flat rate for unlimited data, texting, and calling over a plan that bills only for usage. That is not an unexpected finding, as much as some providers make marketing points about “pay only for what you use.”
As has been true for decades, and nearly the entire internet era, consumers prefer certainty of expense over potential ability to pay only for what they use. That is true even when many consumers understand they might wind up paying more than they would have by using a flat rate service.
That also explains why many consumers buy buckets of usage that are routinely larger than usage: customers want to avoid unexpected charges for incremental usage above the typical amounts.
So much of the demand for unlimited access is as much “cost predictability” as actual demand for higher usage. And much of the supply is motivated more by supplier competition than actual end user demand.
Still, price predictability (flat rates) is valued by consumers. Consider taxi services, where flat rate pricing is preferred over usage-based pricing (charging per mile or fractions of a mile).
AOL found that out in the dial-up era, when it moved to flat rate pricing, and away from metered usage, and saw adoption skyrocket. In fact, one might argue that predictability is key to all consumer interactions.
When AOL moved to flat rate pricing in 1996, going to “unlimited” usage for $19.95 per month, a million new subscribers joined within weeks. Previously, AOL charged $9.95 per month for five hours of usage.
It is difficult to find precise figures for AOL dial-up accounts in service prior to 1995, but there are estimates that 14 percent of U.S. residents used the internet in 1995. By 2000, it appears dial-up access had grown to about 34 percent of U.S. homes, and a great percentage of that was served by AOL.
It seems as though dial-up internet access peaked about 2001, as broadband access supplanted dial-up access.
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