iPhone success could spell the end of flat data plans

Analysts suggest smartphone data usage is costing providers heavily

iPhone success could spell the end of flat data plans
If mobile providers are feeling the threat from any other area of the communications industry, it’s from wi-fi networks. As voice call usage drops, data usage is climbing at a significant rate, and analysts are predicting that the success of devices such as the iPhone could begin to cost their licence holders a lot of money.

Most licence holders, such as AT&T and O2, are providing the iPhone on a flat rate contract (something Apple is very keen on, given the connected nature of its device), but the Wall Street Journal is suggesting that revenues from data and web browsing are unlikely to be profitable as users eat up more and more bandwidth.

As movies and games become more prevalent (with some applications, such as the iPhone port of Myst, weighing in at as much as 700MB), unlimited data plans could soon become too costly for providers to maintain.

But the value of an exclusivity contract makes for a difficult decision for providers. AT&T is apparently considering a contract price cut of $10 per month to keep Apple on side and get the iPhone into more hands, but given the rapidly increasing cost of data usage this could be a move it lives to regret.

Yes. Spanner's his real name. And, yes, he's heard that joke before.