Feature Article

June 23, 2010

The State of 'Friends and Family' Data Plans

At the Securities Industry and Financial Markets Association [SIFMA] show, I had a conversation about where we stood on wireless offerings for the 'Stock Market.' 

As usual the information is anecdotal so you can take it with a grain of salt, but it's significant in a number of ways. First of all, the ability to turn up point-to-point circuits in one day is still a selling point to this market as almost every company has multiple offices -- and the traffic is continually being redesigned. If the company had facilities the turn up was immediate if they needed to build facilities it was usually four weeks.
Verizon Wireless indicated an offering for wireless data services that sounded like a Tariff 12 / Disaster Recovery plan. The indication was Verizon was willing to negotiate a multiline deal that averaged out usage so that the group of wireless data devices could pool their MBs and pay only if an overage existed on the group as a whole.

This represents a strategy to compete with Sprint's/Clearwire's 4G unlimited pricing. If a company can pool the data traffic, it represents some opportunities friends have been discussing with me.

Mark Sampson, CEO of Nexaira, has been explaining that Verizon's wireless router is ideally placed for markets where route diversity could be obtained through wireless networks.

While an HSPA+ 3G device can support 21 MB throughput the 5 GB limit has been a point of contention in my own mind. However, if Tariff 12 like contracts are available, then economically the HSPA+ solutions is not only logical, but cost effective.

A T-1 typically costs about $350 per month. You can do much better in certain places where density matters, but for the rest of the market this is a good number. Regardless of where you are, a typical 5 GB plan costs about $60 per month. 

Now the question is: what is your throughput? A friend not realizing his or her unlimited plan from Verizon's MiFi was capped at 5G has tripled that number this month. 

The result is a bill of about $200. This is still below the cost of T-1. However, the throughput of T-1 in a day is 15 GB so the cost of a 3G HSPA+ solution would rapidly exceed the cost. But as a backup strategy for a two hour outage, this is very cost effective. 

If the use of a bundling plan can be used to support end points where the traffic is lighter this becomes an alternative loop for primary services as well.

Mind you this is not actively being sold, per MDSL who provides an expense tracking system; no one has asked to manage the data equivalent of a Station Message Detail Record [SMDR]. 

However, we should expect to see some soon. 4G is evolving daily.

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