The economics of shared data plans

Soumya Sen, Carlee Joe-Wong, Sangtae Ha

Research output: Chapter in Book/Report/Conference proceedingConference contribution

15 Scopus citations

Abstract

The demand for mobile broadband is doubling every year, forcing ISPs to use pricing as a congestion control mechanism. The largest US ISPs, AT&T and Verizon, have already terminated unlimited offerings in favor of "cap and meter" pricing plans with $10/GB overages. More recently, both ISPs have introduced shared data plans in which multiple devices share a data cap. However, such measures to curb demand can have adverse implications for mobile commerce and online content consumption. Hence, a study of the role of overage fees, usage caps, and shared data plans on the consumer's utility is needed. In this work, we introduce an analytical framework for studying the economics of such shared data plans and model the consumer utility of choosing between shared and separate (individual) data plans for their devices. We utilize usage data from a trial of 34 iPhone and iPad users to explore this tradeoff, and show that the choice between individual and shared data plans depends heavily on consumer's willingness to reduce usage upon exceeding the data cap. Our work creates a framework to study this dependency and indicates the importance of analyzing the impact of such data plans on consumer choice.

Original languageEnglish (US)
Title of host publication22nd Workshop on Information Technologies and Systems, WITS 2012
PublisherUniversity of Florida, Warrington College
Pages157-162
Number of pages6
StatePublished - Jan 1 2012
Event22nd Workshop on Information Technologies and Systems, WITS 2012 - Orlando, FL, United States
Duration: Dec 15 2012Dec 16 2012

Other

Other22nd Workshop on Information Technologies and Systems, WITS 2012
Country/TerritoryUnited States
CityOrlando, FL
Period12/15/1212/16/12

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