Comments on article found at: http://www.wirelessweek.com/News/2010/09/Carriers-Hesse-Metered-Pricing-Sprint-Nextel/
Dan Hesse is putting metered pricing on the table. In a word: Good.
Several months ago, Dan Hesse had openly supported the use of tiered/metered pricing. His recent announcement should not be a surprise to anyone.
Metered pricing is also not in conflict with the carrier’s prepaid plans either.
What metered/tiered pricing represents is a shift from the flat rate plans of old. The biggest advantage of flat rate plans is that based on the number of subscribers the carrier has, a Wall Street analyst can easily calculate monthly revenue; it is a straight multiplication problem.
Usage based, tiered pricing makes it a bit more difficult to calculate monthly revenue. However, usage pricing (metered pricing) is a smart thing to do.
Several months ago, I had written a posting entitled “Sprint – Hesse Says Usage Based Billing in The Works”. I had supported tier pricing back then. Obviously, based on the news media of Spring 2010, Dan Hesse has been looking at metered pricing for months. Analysts should not be surprised by what Sprint is doing.
There are telecom professionals who believe that Dan Hesse should be leading the charge on this and executing metered pricing now. However, AT&T and Verizon have been talking about the same thing.. AT&T is supposed to be moving forward with metered pricing. Verizon has been thinking about moving forward and as I write this is about to make a decision. Metered pricing is a sound mechanism, however, it is all in the timing. Metered pricing is a drastic change in the way mobile users will be paying for data. Executing metered pricing without giving the users time to ready themselves, is like throwing cold water on an unsuspecting person. It would shock the heck out of them.
So will Dan Hesse implement metered pricing right away? Probably not. Will he eve introduce it? I would hazard guess and say: Yes.
Customers prefer simple price plans, but there are benefits to metered pricing.