Any long-time observer of the connectivity business knows that, over time, virtually every revenue metric related to internet access and data services drops: revenue per bit; average revenue per account; average revenue per user.
At the same time, usage per user or per account keeps rising.
A new move by AT&T illustrates the trend. The firm has removed any speed-related limitations for high usage on its “Unlimited Elite” mobile data plan, the most-costly plan AT&T offers its mobile customers. In the past, “unlimited” plans throttled usage past a certain level of consumption.
The latest move by AT&T mirrors earlier moves by T-Mobile, which removed the throttling practice for buyers of its Magenta Max unlimited usage plan.
The objective in both cases is to increase average revenue per account, and therefore total revenues, by offering a plan with perceived higher value at a higher cost.
All that occurs against the expected backdrop of higher mobile data usage over time.
Growth rates for mobile data seem to be increasing at double-digit rates in every geography.
If 5G increases ARPU, it might happen for indirect reasons, such as customers shifting to higher-price plans offering unlimited usage. Use of 5G fixed wireless could play a role. In other cases, higher perceived value might lead to higher spending. AT&T, for example, bundles a HBO Max subscription with its Unlimited Elite plan.
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