Report: Google following Facebook down the zero-rate rabbit hole

Google wants to make Android apps free to use overseas, giving more people access to mobile data services in developing markets, according to a new report in The Information. This kind of zero rating, as it is known, is exactly what Facebook does in several countries as part of its Internet.org initiative. The difference is, the report states, Google wants to exempt Android developers’ services from data charges, not it’s own.

Zero rating is a controversial topic since it could help create a two-sided internet where one company’s services are favored over another’s because they’re cheaper for a consumer to access. [company]T-Mobile[/company] for instance zero-rates dozens of music streaming services, allowing its customers to jam to their hearts’ content without having it count against their data plans. It’s great if you’re one of the companies on the list of exempt apps, but not so great if you’re a new company trying to get noticed.

Oddly, [company]Google[/company] isn’t looking to zero-rate its own apps like Gmail, Maps and Hangouts. Instead it wants to act as a middleman between carriers and app developers that want to foot the cost of their customers’ traffic. Google is talking specifically to ecommerce and on-demand transportation apps in India, using Android software to detect when their apps are accessing the mobile network, The Information reported. [company]AT&T[/company] is striking similar deals with U.S. app developers through its Sponsored Data program.

Zero-rating is pretty common overseas, where carriers often offer unlimited social networking plans to lure customers onto data services. Internet.org basically codifies those same policies across a group of pre-approved apps. In Europe and the U.S., though, zero-rating is on iffier ground as regulators decide whether it violates net neutrality principles. In the U.S. the FCC has proposed new rules that would allow for zero-rated programs in general but would give the commission ome wiggle room to review specific cases for net neutrality infractions.

Report: 80% of all mobile data is consumed by just 10% of users

Cisco Systems this week offered some insight into just how much mobile data the world is consuming — 2.5 exabytes a month, to be exact – and now a new report from Amdocs sheds a little light on who among those billions of users is consuming the most. Amdocs found that just 10 percent of mobile users are consuming 80 percent of the world’s mobile data traffic.

[company]Amdocs[/company], a telecom equipment maker that specializes in billing and network operations, calls these folks the “Technorati,” and it’s easy to figure out who they are. They’re the consumers sporting not just advanced smartphones and tablets but often multiple connected devices.

Those numbers aren’t simply reflecting a split between wealthy and poor countries. Amdocs’ State of the RAN (industry shorthand for radio access network) reported on 25 million voice and data connections in major cities around the world, all with lots of smartphone usage, and found that power users are often using as much as 10 times more data than the average mobile subscriber. And since the average mobile data user consumed 100 percent more data between 2013 and 2014, Amdocs found, the data growth what for these Technorati is even more amplified.

Amdocs State of the RAN

Amdocs found not just a demographic split in data use, but also a geographic one: 20 percent of cell sites were generating 80 percent of all mobile data traffic. These areas tend to be the urban hot zones where people congregate, but those areas are also increasingly indoors. Amdocs discovered that 80 percent of all data funneled to mobile devices is being consumed indoors, and that means a large portion of it is hitting Wi-Fi, not cellular networks.

So going by Amdoc’s numbers, what we’re seeing is a very stratified network as mobile data takes over – much more stratified than when voice was the dominant mobile service. A handful of people are consuming the vast majority of all data and they’re doing it in very specific locations of the network.

Cisco VNI mobile data consumption

And Amdocs isn’t the only company that’s seeing these trends. Cisco’s Visual Networking Index focused on overall global carrier trends, not just major cities, but it found the top 10 percent of users consumed 65 percent of all traffic. Furthermore, by [company]Cisco[/company]’s calculations the highest 1 percent gobbled up 18 percent of all of the world’s mobile data, with each averaging 15.2 GBs per month. Apparently there are even more elite tiers within the world’s data elite.

TracFone fined $40M for selling unlimited plans with clear limits

The Federal Trade Commission is putting mobile carriers on notice that if they advertise an unlimited plan they can’t monkey around with speeds — or at least must clearly disclose their throttling practices up front. After suing AT&T in October, the FTC has now come down on TracFone, the country’s largest virtual mobile operator, fining it $40 million.

TracFone is owned by Mexico-based multinational carrier [company]América Móvil[/company], and it operates as a mobile virtual network operator that buys minutes, texts and megabytes wholesale from the big four U.S. carriers. TracFone then resells those services under several names, including Straight Talk, Simple Mobile, Net 10 and Telcel America. Many of those brands have offered considerable deals to consumers, such as Straight Talk’s $45 plan, which offers unlimited voice and text along with what it claims is unlimited data. The problem was the company hasn’t exactly been upfront with its customers about the clear limits in those so-called unlimited plans.

For instance, in 2012 Straight Talk advertised unlimited data with no caveat when in reality it started warning and then cutting users off if they went over a 2 GB limit. Later it started slowing down the speeds of users after they crossed certain thresholds (in 2014, TracFone claimed throttling didn’t kick in until about 3 GBs), but it was still calling its data service unlimited As the FTC pointed out, it wasn’t exactly upfront with customers that their speeds could capped.

Though the FTC reached a settlement with TracFone, it apparently isn’t making it dump its use of the term “unlimited” in its advertising. Instead TracFone “must clearly and conspicuously disclose any limits on the speed or quantity of its data service.”

Customers who have been throttled under one of TracFone’s plans though are eligible for a refund. You can visit the FTC’s website to file a claim.

Virgin’s new shared data plans swap customization for simplicity

When Virgin Mobile launched its Custom plans at Walmart last summer, it created the most flexible prepaid family plans in the U.S. Thanks to technology provided by ItsOn, customers could pick specific buckets of minutes, texts and megabytes and share them with family members. They could even tailor individual phone plans for services like social networking and navigation.

There was only one problem: If anything, the plans were too flexible.

Virgin encountered situations where five different people on a custom family plan would all opt for different minute, text and data buckets and then start swapping their allocations between each other at the end of the month, Virgin director of corporate communications Jayne Wallace told me. It became very difficult and confusing to manage such accounts, she said, so Virgin decided to simplify its structure.

Starting on Saturday, Virgin and [company]Walmart[/company] will begin replacing Virgin Custom phone kits with a new Walmart exclusive program called Data Done Right. The new program definitely makes these service plans easier to manage, though a lot of the granular customization features are sacrificed.

All but the cheapest $35 individual plan come with unlimited voice and SMS, and from there, the pricing varies based on how many lines you purchase and the size of your data bucket. $45 gets you 2.5GB on a single line, while $65 gets you 4GB shared between two lines, $90 8GB over three lines and $115 12GB over four lines. You can add additional gigabytes to a plan for $10 a pop.

Virgin, which is one of [company]Sprint[/company]’s prepaid arms, is also offering a much better selection of phones in the new plans, all of which support Sprint’s LTE service: The [company]HTC[/company] Desire 510 ($99.88), [company]LG[/company] Tribute ($79.88) and LG Volt ($149.88), and the new [company]Samsung[/company] Galaxy Core Prime ($129.88). All of the phones also have mobile hotspot features so you can share that data plan with other devices.

These plans are easier to comprehend, but it’s a shame that the ability to tailor your own plan is left on the wayside. Previously, you could create any manner of plan that reflected how you and each member of your family used their mobile service. Ultimately, though, Virgin’s new rates are pretty cheap, so the price difference between customizing a family plan and opting for a pre-packaged tier isn’t going to be much different. In fact, in many cases, you’ll probably see cost savings. If you’re on a custom plan today, though, Virgin will continue to maintain it, Wallace said.

And Virgin isn’t doing away with customization entirely. It’s keeping some of the add-on features that made the program unique, such as $5 a month for unlimited social media and music stream usage (data from apps like [company]Facebook[/company] and [company]Pandora[/company] won’t count against your data allotment). It’s also keeping the ItsOn-designed management app in place, which lets parents fine-tune the usage of every line on their accounts. For instance, they could restrict certain apps from being used on a child’s device or set a “data curfew” for 10 PM, after which a phone would stop surfing the internet.

Get ready to bank your MBs: T-Mobile’s Data Stash goes live Jan 1

Starting tomorrow, many T-Mobile customers will start seeing a new item show up on their bills: a bank of unused megabytes or gigabytes that customers can save up for a data-intensive day.

[company]T-Mobile[/company]’s Data Stash rollover program goes into effect on New Year’s Day, and customers should start seeing their respective stashes appear in their online accounts within 24 hours of their first billing cycle in January, T-Mobile confirmed. T-Mobile is seeding all of these accounts with 10 GBs of free data, and after that data is used up any unused megabytes or gigabytes from your monthly plan will start accruing in the stash (For some inexplicable reason, T-Mobile won’t rollover any new data until that 10 GB is entirely consumed).

Announced earlier this month as part of T-Mobile’s “Uncarrier” strategy to shake up the U.S. wireless industry, Data Stash represents the first time a major U.S. carrier has let customers keep their unused portion of their monthly data buckets at the end of the billing cycle. Traditionally carriers have taken a better-safe-than-sorry approach to marketing data plans, often selling consumers more data than they need so they can avoid paying overage fees on any given month.

The Paramount Theater in Seattle played host to T-Mobile's Uncarrier 5.0 event in June.

Data Stash is definitely a move toward more consumer-friendly data pricing models, though in my opinion T-Mo could have gone further. If T-Mobile really wanted to truly level the terrain for the consumers it should have started selling data by the gigabyte. Once you use up your first gigabyte, you purchase another and so forth – similar to the way we buy gasoline. Some small virtual carriers like Karma are exploring those kinds of metered data models, but it’s safe to say not even the progressive of the major carriers is willing to take that step yet.

But give credit to T-Mobile: Data Stash will is a big step in the right direction, and it’s available at no extra charge. So do you stand to benefit from having a data stash? It depends on how you use data, and in general heavier smartphone data users will benefit from Stash a lot more than lighter users. Almost everyone with a T-Mobile tablet plan, however, will find Data Stash useful.

Who gets a stash and who doesn’t

First off, it’s important to note that the program is only available to T-Mobile’s postpaid customers on a 3 GB or 5 GB Simple Choice individual plans, so you have to buy a lot of monthly data in order to save it. Stash does little good for you if you’re on an unlimited plan, it goes without saying. And if you’re on T-Mo’s 1 GB or 500 MB plan or are a prepaid customer, your unused 4G data will expire at the end of your billing cycle just as it always has.

According to T-Mobile SVP of Marketing Andrew Sherrard, though, about 80 percent of T-Mobile’s postpaid customers are on 3 GB or greater data plan, so a good part of T-Mo’s customer base will benefit.

piggy bank

There’s also another way of looking at the figure, however: it could be a good deal of T-Mobile’s customers are over-subscribing to data each month because the next rung below the 3 GB tier is a 1 GB plan. Meanwhile the average smartphone data consumption in the U.S. is about 2.2 GBs per month, according to Chetan Sharma Consulting. T-Mobile has been doing the same thing it accuses its competitors of doing: selling customers more data than they need each month.

The big advantage of having a rollover plan is that lets you prepare for the typical month of data usage instead of always preparing for the worst-case scenario. Take my own data consumption: I lean heavily on Wi-Fi (and, sadly, rarely leave the home/office) so my data use is well under 2 GBs each month. But when I travel for work or pleasure my data usage spikes as my Wi-Fi connection gives way to cellular and I rely on my smartphone’s connection more for work and entertainment. I need a 2 GB plan or greater plan for those few months I’m spending more than a few days away from my neighborhood, and more often than not 2 GBs isn’t enough.

“Averages are really dangerous,” Sherrard pointed out. Your monthly average means nothing that one week you’re spending at a work retreat or that summer every four years when the World Cup is on and you’re streaming games every lunch break, Sherrard said. Data Stash is perfect for those types of situations, Sherrard said.

If you’re looking forward to Data Stash as a means of saving you money, you’ll probably be disappointed. While there are some people who may be able to downgrade from 5 GB to a 3 GB plan by banking gigabytes, it’s not possible to use Data Stash to downgrade to a 1 GB plan. Most people will find themselves subscribing to the same data buckets they always have. And if you have a 1 GB plan today, you would actually have to pay more money to take advantage of the program.

The advantage, however, will come when those worst-case scenarios present themselves: When Italy is paying France in the semifinal and you have to sneak out of the office to watch it in the bushes or when you’re enduring a long layover at the airport and decide to stream Lord of the Rings. These aren’t scenarios a 3 GB or even a 5 GB plan could normally handle without the help of a few stored up gigabytes in the bank.

The one big caveat is you have to use up your stored data within a year of accruing it. So any unused data banked next month will need to be consumed by January of 2016 and so forth. 

Now let’s talk tablets

For tablets, Data Stash kicks in at the 1 GB tier, which means anyone with a paid data plan (T-Mobile’s free 200 MB bare bones plan doesn’t count) can use it. That’s a pretty important point because most people aren’t using mobile data on tablets the way they use it on smartphones, at least not yet.

tablet usage generic

Because tablets consume much more bandwidth than the typical smartphone and the costs of data are still high, we tend to restrict our slates to pools of Wi-Fi and use 4G cellular as a backup. I don’t think Data Stash will change that basic pattern, but it is far better suited to deal with the tablet’s extremes. For instance, you could go two months without connecting your tablet to the cellular network and then one day consume 3 GBs in a single sitting. Even if you’re on the most basic 1 GB plan, you’re still prepared for that scenario.

In short, Data Stash could go further. This program isn’t going to revolutionize the way you buy data or slash your monthly phone bill by $20. But it will come in awfully handy at the times when you need a hefty chunk of data the most.

This post was update at 4:45 PM PT to clarify that rollover data will only kick in after customers use up their initial 10 GBs of free stash data.

T-Mobile intros Data Stash, a rollover plan for unused gigabytes

T-Mobile is flouting one of the biggest taboos of the mobile industry: The monthly data allotment. T-Mobile CEO John Legere on Tuesday announced a new program called Data Stash, which allows you to roll over unused data each month into a kind of 4G piggy bank and use it for up to a year if you exceed your normal data plan in a given billing period.

Typically you buy a mobile data plan that comes with a set number of gigabytes or megabytes each month, but whatever you have left over at the end of the billing cycle disappears into the ether. That’s left consumers with two equally unattractive propositions, Legere told Yahoo’s David Pogue in a webcast interview. Customers either lowball their monthly data usage and wind up paying overage fees or they overestimate their data use and often wind up with leftover gigabytes each month, Legere said.

Data Stash will let customers bank that unused data each month. After a year, saved data does expire – January’s unused data is good until the following January — but there doesn’t seem any limit on how much data you can store up. In fact, Legere said T-Mobile would seed every customer’s Data Stash with 10 GBs when they sign up.

“It’s your data,” Legere said. “What you don’t use, you don’t lose.”

T-Mobile US CEO John Legere at CES

T-Mobile US CEO John Legere at CES

[company]T-Mobile[/company] will launch the program in January, and it will be available at no extra charge for any customer on a Simple Choice plan with a 3 GB or more monthly data bucket and on tablet plans with 1 GB or more.

Legere spent a lot of time bashing other carriers own practices of charging data overage fees and overselling data buckets, though T-Mobile until today perpetuated the same business model for much of its recent history as well. The difference is most of T-Mobile’s plans don’t come with overage fees or additional data purchase options. Instead T-Mobile currently throttles back bandwidth to 2G speeds for any customer who exceeds their data allotment in a billing cycle. When the new billing cycle begins speeds return to normal.

Smaller virtual operators like FreedomPop have launched data rollover programs in the past, and even [company]Verizon[/company] has experimented with rollover on its prepaid plans. But no major carrier has taken a data rollover program to such a level. Selling customers more data than they can use has been a classic way of milking more money from subscribers in recent years, just as selling consumers oversized voice minute buckets was they traditional ploy of the previous decade.

The announcement is part of T-Mobile’s evolving Uncarrier strategy — technically its 8th installment — in which T-Mobile has challenged many of the established norms of the mobile carrier business, including contract and subsidy programs and international roaming fees. What will be interesting to see is if other carriers follow in T-Mobile’s footsteps as they did with its Jump upgrade program and no-contract plans.