By Ryan Knutson
U.S. wireless carriers in the middle of a price war have been
able to take refuge in one fact: Subscribers are often paying for
more data than they use. Now that bulwark is under attack as
well.
Republic Wireless, an upstart carrier based in North Carolina,
said Monday it is working on plans that only charge customers for
the exact amount of data they actually use. On another front, a
company called Karma sells mobile Wi-Fi hot spots that allow
customers to buy data that never expires.
Those moves are at the fringe of the market, but the leading
nationwide carriers are also making changes. Recently, T-Mobile US
Inc. and AT&T Inc. introduced rollover data plans that let
customers carry unused data into the next month.
The new offers are starting to chip away at "breakage" --
services that customers pay for but don't use. The term, which
dates back to the days when counting voice minutes was the norm, is
back in vogue now that unlimited data plans have given way to
alternatives that offer a fixed amount of gigabytes.
While carriers have lowered the price per megabyte, they have
successfully persuaded customers to spend more on larger data
buckets that appear more economical. A 2013 study by Validas, a
company that analyzes wireless bills to help people choose which
plans to buy, says consumers typically waste $28 a month on data
that goes unused.
"People aren't using the same amount every month but they're
paying the same," said David Morken, co-founder of Republic
Wireless.
Republic Wireless has just a few hundred thousand customers, but
is at the forefront of efforts by startup wireless providers to
push traffic away from cellular networks and toward cheaper Wi-Fi.
American wireless subscribers already consume most of their data
over Wi-Fi connections, but their bills don't reflect that.
Republic launched its service in 2011. It sells phones that
route traffic over available Wi-Fi connections first, then uses
Sprint Corp.'s network when Wi-Fi isn't available. Current plans
start at $5 a month for service over Wi-Fi only and increase to $40
for unlimited talk, text and data, even when using the Sprint
fallback connection.
A handful of other companies have launched Wi-Fi-first services
in recent years, including Cablevision Systems Corp., which earlier
this year started selling phones under a plan called Freewheel that
works only when connected to Wi-Fi.
Mr. Morken said the company has been developing plans over the
past several months that will be available to consumers this
summer. Instead of offering unlimited options, the company will
sell one plan, likely around $10 a month, for unlimited talk and
text, even in areas when Wi-Fi is unavailable. Customers will be
able to buy packs of cell data and will be reimbursed at the end of
each month for the amount of data they don't use.
Write to Ryan Knutson at ryan.knutson@wsj.com
Access Investor Kit for AT&T, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US00206R1023
Subscribe to WSJ: http://online.wsj.com?mod=djnwires