Vodafone UK announced this week that it was making a significant change to its unlimited data plans, and will now begin charging users if they go over 500MB of traffic in a month. This comes after operators like AT&T and Verizon in the US have talked about seeing the industry shift to usage-based data pricing from flat-rate or unlimited plans. These sorts of stories might not seem all that important for mobile developers, but they're worth paying attention to.
Undoubtedly one of the industry trends that sowed the seeds of the current boom in mobile data use and app downloads was the spread of affordable flat-rate data plans. No matter what the actual financial cost of usage-based pricing plans, they carry a significant mental transaction cost for users, where they're constantly trying to decide if a link is worth clicking on, or something's worth downloading, because they're being charged for it. By setting data usage at an easily understood flat monthly rate, that transaction cost disappears, and usage skyrockets. But some operators say the flat-rate model is unsustainable, and that their network infrastructure, or more specifically, their need to invest in it, can't keep pace with the volume of traffic, so they need to shift back to usage-based tariffs.
It's not clear what the impact on overall usage will be, should the industry make a large-scale move back to usage-based models. The hope among operators is that users won't change their behavior, and that they'll be able to derive more revenue from the heaviest users. But it's a legitimate concern that usage-based models could once again stifle the use of mobile data services and apps among the public. So what's a developer to do?
It's important to be aware of this trend and ready to act on it on a few levels. Obviously there's a need to minimize the amount of data your app consumes, and ensure it's not doing so needlessly -- but, of course, that can only go so far. But it's also important to consider those mental transaction costs. Developers can help minimize these by making it clear to consumers how much data their app will consume in an easy to understand way, both in app store or other pre-sale listings, and in the app itself. Taking steps to decrease consumers' anxiety and reduce the likelihood of bill shock will help developers deal with any significant shift away from flat-rate plans -- and act as a competitve advantage over other developers who are slow to pick up on the move.