Thanks so much for the comments.

To address some questions…..

1) iPhone and Verizon: No word on that, I'm afraid. However, Deloitte Canada's head analyst for media and entertainment predicted that one major cell carrier would "go away" in 2010 in the US. He thinks there's one too many.

2) Michael Myers: Yes, you are right. With social media, users are in control because they make/edit/post the content. It's a great thing.

3) Per-Fredrik: Very insightful thoughts. After I posted, more ideas came to light from some of the participants. Ignoring data plans for a second; WiFi might save the day. As WiFI becomes even more ubiquitous (more in the workplace, more public places, more in-home installs), a lot of that traffic, including the high demand stuff, could be pushed off the cell tower network. Related little data nugget: 80% of people watch TV and use their cell phone at the same time…probably at home, on their couch, in range of their WiFi router.

On the handset OS side, a number of solutions were discussed. 1) Caching. Perhaps the OS makers could find a way to cache more of the data you've already downloaded instead of reloading it every time? 2) Built-in stop signs. For video, perhaps files of a certain size just aren't allowed to be fully downloaded on 3G? I see this in audio already. Some podcasts >25MB must go over WiFi. 3) Compression. This seems pretty likely as this is what happened back in the young Internet days.

On the data-plan side, it's a really big problem. Content makers are worried that if the carriers move to a $/MB rate – even if it's a really low rate – consumers won't be able to calculate in their heads how much data is consumed in what context and will just stop downloading things all together. This is bad for everyone. Content producers get less traffic and carriers get less traffic — and both of those groups get paid from traffic.

What seems likely is a technology solution that solves some of the problem coupled with a capped data plan that gives you A LOT of data, but snares the upper 15% of data users with added fees. This keeps 85% of people happy with their service…which would be astounding in the mobile carrier world!

Mobile internet use from mobile phones is growing fast thanks to the fixed price plans. If not already, networks are soon reaching a point where the production cost for that traffic is higher than the revenue. A price war on data plans will furhter agravate the situation.

Cross-subsidies is commonplace in the telco world. But with fixed revenues dissappearing and mobile voice and sms dropping, what revenue stream will subsidise a potential data traffic loss? The Ericssons of the world are hard at work trying to push the production cost down with all types of measures. because in the end the consumer is used to a flat fee for internet access from fixed bradband. We will not accept a different model for mobile broadband. Maybe a premium for the mobility, but still fixed.

The iPhone success is in this scenario probably more Apple's than the carrier's. The phone is heavily subsidised by the carrier (higher acquisition cost), traffic revenue is shared with Apple (lower margin on the traffic) and the typical iPhone user is a real capacity guzzler (higher cost for data traffic). Seems to be a dangerous path to be on long term.

Suggestions that can help the situation:
- Carriers and network providers to work together on all possible measures to increase capacity at lower cost per unit. Network sharing, compression technologies, outsourcing network ops etc.
- Carriers to sell data traffic wholesale to service providers so that delivery cost can be built in to price paid for the actual consumer service. This will also give transaprent pricing to users with the full cost from A to Z communicated in one price, not in two prices; the fee for the service plus the phone bill with the data plan.

What else is discussed at Mobile Innovation Week as solutions to the data guzzling and the costs they drive? Over at the mobiletribe blog we are discussing these and other issues the mobile entertainment and apps industry face daily.
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