Phone charges are starting to make more sense--and promise to make more cents for the carriers!

It was just a matter of time...and, apparently, the right time just arrived.

Over the past week, mobile phone and data carriers lowered the price of using a cell phone, while arguably keeping the charge for smart-phone users fundamentally the same.  This decision was destined to be made...it was just a matter of when.  Over the last few days, all the major players have pretty much made the same decision:  Lower the cost of operating a simple, conventional cell phone and start charging a premium for the use of smart-phones for the transmission data hogs they are.  

This blog called attention to this problem some time ago [Get ready for a smart phone that won't work like it's supposed to anymore.  Apple & AT&T, are you paying attention?]--and we are presently seeing how the problem of capacity demand will be addressed. 

Verizon Wireless lowered prices 30% with AT&T following close behind with the same decision--but that's for people with regular, not-fancy mobile devices; texting privileges get added back in and you're close to where you started to begin with, i.e., before the price drop.  But what's important now is what got changed is now an added new charge for data transmission for data-intensive smart devices, those that serve as platforms for internet streaming, eMailing, GPS services, advertising, web-surfing, video sharing, and more.  

It wasn't reasonable to keep charging limited system users and high-use consumers the same price.

These devices--like the iPhone and Google's Droid--are, certainly compared to earlier devices dedicated mostly to mobile voice transmission, very system-demanding in terms of band-with and data transmission--so the worry for sometime has been what gives?  An overload of the system for lack of collecting fees commensurate to the usage of newer "phones," or the raising of rates to make the utilization of services more equitable and pay for expansion of the system.  

What's happened in the past week as been the disaggregation of fees from basic, to basic-plus.  The major carriers are now better prepared to make capacity--and, more directly, pricing--adjustments to the demands of an increasing number of data-hungry smart phones.  Now with the swelling of the smart phone market, the bundle of services for these customers will no longer be the same standard fare for lesser-demanding callers--it'll be broken into multiple parts which will have two very positive effects for the carriers. 

The carriers will benefit in more ways than one, but smart phone consumers will pay more.  

First, carriers will now have more favorable prices to advertise with to attract new customers into an increasing saturated cell phone market--all the while not necessarily touting the additional or differential data fees, depending on the "horse-power" of the phone the customer may wish to use.  Equally attractive to the carrier is the ability to directly, specifically, and differentially raise usage rates for system hogs whenever the time and circumstances justify it--for individuals customers, or the market generally.  

The decision to break-down prices this way has not existed since the beginning.  Carriers wanted to avoid this for as long as possible--to ensure the steady success of the smart-phone introduction, but the growth of that market seems pretty assured.  And, too, the product life-cycle of cell phones generally has begun to plateau, so profit margins are beginning to be eroded for sake of gaining competitive advantage with respect to late adopters and innovation laggards of cell phone users more broadly.

It's a win-win-win kind of deal.  

Everybody's on their way to being happy:  Simple cell phone users--certainly on a comparative basis--will pay less; smart-phone users will ensure that the capacity they require to operate their various data processing devices will be provided--but they'll pay more in the process.  The carriers will gain from more numbers of both types of users as well as make more money than they were otherwise destined to get under the old pricing plan.  Now that's a pretty sweet outcome I'd say!  

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