Are 4G Networks Worth It?

Most smartphone users (i.e., mostly everyone) have been getting excited by mobile providers new claims on their 4G networks. The speeds are supposedly incredible and who could resist the possibility of downloading a full-length HD movie right to your phone? But before you get too jazzed, you might want to check out the recent post by Public Knowledge’s Michael Weinberg about 4G data-caps.

According to Weinberg, all mobile plans (save Sprint’s unlimited) cap at 2GB per month, which severely inhibits your ability to use the full capabilities of the network through downloading content or streaming video or music before getting overcharged:

“Under AT&T and Verizon’s 2 GB monthly limit, you could download half of an HD movie from iTunes before hitting your limit.  Alternatively, you could download two 45-minute HD TV shows.  If you shot some video you wanted to share with friends, you might be able to upload 2 ten-minute videos…You could stream about 4 hours of content from Netflix (again, assuming you did not need your phone for anything else that month), or less than 30 minutes of music per day from a subscription music service.”

Not only is this terrible for users, think about what it means for gamified app developers, who are dependent on high speed networks to make their product worthwhile!  This level of speed should be driving more interesting, more advanced social and gaming apps. With users having to be much more economical with their data plans, what they download and play will become that much more of a competitive market. Users will likely stop using apps they used to love that require date usage.

Location-based apps like Foursquare and SCVNGR, that have been steadily increasing in popularity since incorporating vendor deals, will see a sudden drop in usage. Though these apps use a small amount of data, there success is in frequency of  use and encouraging users to check-in everywhere they go. If data becomes scarce, becoming mayor of your favorite coffee bar, or taking part in fun challenges will be the first actions cut. This would lead to their partnerships becoming less valuable and developers suffering when companies were no longer interested in offering deals through their apps. ARGs are becoming more detailed and advanced all the time. Limited data usage will inhibit the grow of this powerful marketing technique. Even Yelp, that uses augmented reality to show nearby venues in virtual space, would either have to develop a more basic app or deal with decreased usage. Sure, a faster network is great, but what’s the point if no one can afford to use it to it’s fullest extent? In the end, it seems like mobile providers will be slowing us down more than ever!

An interesting solution would be to create a kind of  “1-800 number” approach to data usage. Instead of charging the user for overages, the excessive cost can be billed to the app developer. This way users wouldn’t have to be as hesitant to keep using their favorite apps or try news ones and could continue to enjoy uninterrupted service. The advantage would go to the developers willing to pay this fee, as most likely all of them won’t – at least in the beginning. This would, of course, increase an already competitive marketplace and put undue burden on smaller start up companies would most likely can’t afford to cover such fees.

Obviously, the best solution would be for mobile providers to back down on these ridiculous date caps. The sheer greed driving these charges decreases the value of the service and will deter people from upgrading. Consumers are smart and won’t be enticed by faster speeds if they’re too expensive and ultimately useless. The only people mobile providers are fooling, are themselves.