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Will monthly data caps kill mobile entertainment?

May 18, 2012

“Trying to put the toothpaste back into the tube”

A major wireless carrier announced yesterday that they will be eliminating the unlimited data plan for subscribers who upgrade their devices from 3G to LTE, forcing them onto yet-undefined shared-data plans which will assuredly have monthly data caps.

So in the near term, consumers upgrading devices will have to metaphorically choose between unlimited usage of Atlanta’s Highway 400 during rush hour in their Yugo (or insert your own example of gridlock hell), or driving on the same highway at 3am Sunday morning in their Porsche 911 Turbo and paying per mile.

If you were a heavy blackberry user sending mostly emails and texts, there is a slim chance this will impact you. However, if you’re like the majority of mobile subscribers, you probably would prefer to be the Facebooking, YouTubing, Hulu-ing, iTuning Instagrammer that you are (and we want you to be).

However…with data caps this becomes increasingly difficult without spending a small fortune on data overages.

To put this plan modification in perspective, let’s take a look at how a subscriber who is currently grandfathered into the $30 unlimited data plan would be affected. Assuming this subscriber wants to continue paying $30/month for now-LTE data access, they would now be capped at 2 GB per month ($10/GB after that).

So what does 2 GB at $30 per month get you on iTunes, on average, from a download perspective?

Only half of an HD movie! Also keep in mind that this doesn’t include the purchase cost of the media which can run up to $15-20 for a new release HD film.

So using “Transformers: Dark of the Moon” (size: 4.79 GB) as an actual example from iTunes – let’s look at how much this would cost to purchase and download to your iPhone or iPad over a mobile network:

Purchase of HD version (720p): $19.99

Download costs: $30 for first 2 GB + $27.90 for remaining 2.79 GB

Total cost: $77.89

Yes, this is unfortunately going to be a new “stealth tax” on consumers who want to enjoy mobile entertainment on the go. Cue the consumer outrage and congressional hearings.

Stay tuned, more to come on this subject…

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