Cannibalization Saga
11 July, 2013
Leading telecom experts say that Mobile Carriers need to put data caps on their LTE –Long Term Evolution services due to excessive traffic causing massive engineering challenges, the major reason carriers are placing data caps on their LTE services is to prevent users from going exclusively with wireless data services and ditching their landline connections. Telecom industry has already faced cannibalization of “old” telecom services in Georgia, Skype cannibalized ICQ and videoconferencing, Viber is eating mobile roaming, pagers and street
payphones died due to rollout of GSM networks, LTE is blowing down fixed phone landlines.
While carriers have been marketing LTE for its bandwidth and download speeds, the real benefit of LTE is that it provides users with a native IP connection, which in the long run will provide cheaper wireless connectivity for users than previous cellular technologies such as HSPA ( Evolved High-Speed Packet Access) and EV-DO (Evolution-Data Only) .
This may seem somewhat counterintuitive given that carriers are currently charging a premium for LTE services. Carriers are able to do this because they’ve successfully marketed LTE as a game-changer in terms of providing data speeds to smartphones and tablets. However, most Smartphone users don’t require LTE-level data speeds to meet their needs and predicts that consumers will start to pay less for LTE connectivity once more competitors hit the market.
The wireless industry has been moving away from all-you-can-eat data plans over the past couple of years and toward tiered service plans that place caps on monthly data consumption. AT&T in the USA got the ball rolling in 2013 when it announced it was dropping unlimited data plans offered between 300MB at 20 USD=33,10 lari per month and 5GB of data consumption at 50 USD=82,75 lari per month.
Let’s jump back into Georgia: Geocell charges for 500 MB 10 lari and for 5 GB 30 lari rate is valid for 30 days.
Magticom offers data plan “M” 500 MB at 119 lari per month covering 300 minutes of talk time and 300 SMS messages besides this makes a gift of 5 minutes of international call and SMS secretary.
Beeline Georgia has an offer of 200 MB at2 lari and 1 GB at 7 lari. Besides, this got unlimited Internet package at 7 lari for prepaid Customers only with maximum lock of 3 GB per month.
How the service portfolio and rates would change depends upon LTE network rollout in Georgia, Ericsson Corp.’s forecast for 2014 / 2019 is that 80% of data traffic growth in mobile networks elsewhere in the world would be video, this means that users should have unlimited data plans for Smartphones, although the mobile carriers could impose data caps for devices such as tablets that are likely to use greater amounts of data/video.