Editorial

Mobile minutes are dead, data buckets are King

It was not that long ago that AT&T dropped its unlimited data plan and Verizon more recently killed off its unlimited data plans as well. While Sprint still has unlimited data and T-Mobile is still around and kicking but likely to be consumed by AT&T, the unlimited data options are a dying breed.

A question that arises rather frequently is why do we suddenly need data buckets? For the past several years we have done without them and networks have not crumbled under the pressure. Even more so, with 4G now being rolled out, aren’t data buckets hampering our use of mobile data? If you stream a couple movies from Netflix, you will owe three life savings to your mobile operator.

Mobile minutes, to draw an easy comparison, started back in the dial up Internet days. Nearly everyone can remember the days of receiving a floppy disk in the mail or a CD from AOL offering a free bucket of minutes to try out their service. The idea was simple; you paid AOL for a certain allotment of minutes per month for surfing the Internet.

Image Credit: Bansheeblog

This business model was adopted by wireless carriers. You bought a Zack Morris phone and were allowed to talk for a certain allotment of minutes each month. This business model still exists but has been slowing going the way of the Dodo. All carriers now feature an unlimited talk plan because cell phone minutes are not as profitable as they once were.

Smartphone users represent a new data stream. We all know that data is the new premium add-on that wireless providers use to beef up their bottom line. What started out as unlimited data for a set fee is now taking a step backwards towards data buckets that act exactly like the minute buckets of yesteryear.

But you need to look further than why a cell phone provider wants to lock you into data buckets today. While the current data buckets don’t present many barriers, in the future, they will become much more critical and wireless providers are laying the groundwork for a future of more profits.

Everything stated so far has been relatively common knowledge, but where we are going may not be fully understood.

In the future, VoIP will become the new king of wireless communication. Verizon, Sprint, and AT&T, they are working towards (in the future) moving their voice communication to VoIP. Meaning, you will use your data connection for voice calls in the future. This practice is common on land lines, most businesses use this VOIP for communication, and the consumer can use it with services like Vonage.

There are peeks of this transition already happening. If you have a smartphone, you have the ability to use Skype/Google Voice or another service to keep from using the minutes you already have. When carriers have an unlimited data bucket, you could effectively use a service such as Skype and take control away from the carriers. As you can imagine, they do not want this to happen. By forcing you to use a data bucket, they can regain control of their revenue streams and stop allowing others to profit on their connections.

When VoIP comes to the cell phone industry and is implemented by the carriers, your minute buckets will go away. The future plan is a data bucket that covers your calls and emails. You will no longer buy plans that have 500 minutes and 2 GB of data but instead one plan that has 3GB of data and that is it. How you use your data is up to you; it could be all calls, it could be all emails, Either way, the carriers have you capped.

Image Credit: conferencephones.net

The carriers will market this new technique by calling it HD Voice. This marketing term is already being tossed around and some carriers around the world already support the feature, although it is not true VOIP. This new feature will come at the expense of eventually ditching minutes for data buckets.

In short, data buckets will soon cover your cellphone minutes under the disguise of HD Voice. While data buckets may not be impacting you today, when tomorrow rolls around with HD Voice, they will become immensely important to a carrier’s bottom line.

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25 Comments

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I don't think the move to data-based voice will come soon because of the battery life of the average smartphone is too low. It probably won't match 2G (GSM) in terms of the impact it has on battery life. Also, it'd add more strain on existing data infrastructure while wasting resources that were originally intended for 2G voice.

Still with the mobile minutes here oh and shh, before they do away the unlimited data package plan! Just kidding, it'll get here soon.

Mobile minutes are dead, data buckets are King...........in the US.


Everywhere else, people die for mobile unlimited minutes. I do always wonder why do people in the US get charged when they recieve a call. Makes no sense.

Thanks to you "youngin's", I'm sitting pretty. I use an average of 2000 voice minutes a month, with an ungodly amount of left over minutes, and around 1.5 gig a month data, 2-300 text messages.
A move to VoIP will be great for me

Moved to 3 in the UK for their unlimited data. Not a bad deal, data plus 5000 minutes and 5000 texts. Don't use anything really bar the data.

I think Microsoft should buy T-Mobile for its 3/4G and offer unlimited everything for $40/month now that they have Skype and already Messenger. They will need to venture into other business to keep the cash revenue flowing.

LAMj said,
I think Microsoft should buy T-Mobile for its 3/4G and offer unlimited everything for $40/month now that they have Skype and already Messenger. They will need to venture into other business to keep the cash revenue flowing.

Microsoft buying T-Mobile USA? There are way better companies on the list worth investing for MS, but telcos are at the very bottom if at all. If MS bought T-Mobile USA, you'd definitely see that as probably being the only network in the US having Windows Phone. Considering the coverage, service, and data network are rather poor (hence the low cost for just 'adequate') Microsoft probably would not even want it.

My famly does T-Mobile so I know how their network is. Plus to even go through regulatory approval would probably fail. I don't get why people that propose Microsoft by this or that don't even consider how feasible it is in reality. Maybe in your imagination, but defintiely not in reality for the near future.

Carriers don't charge data usage fees for MMS. What makes you think they will charge data for using their own VoIP service? They are still going to be able to charge VoIP calls using their current billing practices. Your logic is faulty. Minutes won't go away, voice will just become more efficient.

I have more SMS in my contract than I will ever know what to do with, but my son (16) needs unlimited. I think he sent a couple of thousand last month. Good job nobody in the UK actually pays for receiving them as I hear happens in less consumer friendly countries.

no-sweat said,
nevar getting rid of my $35/mo unlimited everything with sprinttttttt

Subject to fair usage policy which they can enforce any time they like.....

no-sweat said,
nevar getting rid of my $35/mo unlimited everything with sprinttttttt

Don't believe they ever had a $35/mo unlimited everything plan, it was $99 IIRC, you must have got in on a "slickdeal.net" post or something.. but that is not the norm.

xendrome said,

Don't believe they ever had a $35/mo unlimited everything plan, it was $99 IIRC, you must have got in on a "slickdeal.net" post or something.. but that is not the norm.

Yeah it's a SERO plan they don't offer anymore. Had it for years.

ye ai have started moving to just using data! saves me money too, i have Facebook/Google chat/twitter and skype on my android and alot of people contact me though them, and not texting. and with Wellington(NZ) starting there free wifi access around the CDB its going to be great!

yeah, HD voice is used by Orange in the U.K. Hopefully all phones will come with this and all networks will support it as the audio quality on phones sucks, hard to understand what the person is saying sometimes.

torrentthief said,
yeah, HD voice is used by Orange in the U.K. Hopefully all phones will come with this and all networks will support it as the audio quality on phones sucks, hard to understand what the person is saying sometimes.

I h ve no ide wh t y 're tal ng ab t

Yeah i'd say. Even the SMS cash cow is dying now too. There's no way in hell it costs $0.20 to send a freaking SMS! I don't care even what they say, it was robbery! Good it's all unlimited now though! Even though they charge $10-20/month for that (depending on carrier).

I get unlimited voice/sms but they wont dare give away unlimited data now

SHoTTa35 said,
Yeah i'd say. Even the SMS cash cow is dying now too. There's no way in hell it costs $0.20 to send a freaking SMS! I don't care even what they say, it was robbery! Good it's all unlimited now though! Even though they charge $10-20/month for that (depending on carrier).

I get unlimited voice/sms but they wont dare give away unlimited data now

I feel like long ago before texting took off, texts could consist of over 1000 characters and cost about $0.05 to send or receive. It's amazing how far we've come! More expensive for less of the same thing!

Tanshin said,

I feel like long ago before texting took off, texts could consist of over 1000 characters and cost about $0.05 to send or receive. It's amazing how far we've come! More expensive for less of the same thing!

This is hilarious. I live in Australia and I just read an article about our telcos being banned from using the term 'unlimited' or 'cap' because its never actually true... you guys have it so easy in the US. We have always paid 25cents per sms, 1.50$ for each minute you call and you only get about 500mb a month unless you want to end up paying in gold.

So count your blessings, Americans. Most Aussies would kill for anything like unlimited call/data/texts/ anything!

SHoTTa35 said,
Even the SMS cash cow is dying now too. There's no way in hell it costs $0.20 to send a freaking SMS! (

Each SMS costs the telcos exactly NOTHING. It's being carried as part of the normal handshake required of all cell phones.

In other words, the phones have always been sending the same messages all of the time. It's just that now the empty space is filled with YOUR text instead of theirs/random.

Every penny you have ever paid for an SMS went to the phone company as pure profit. There was NEVER any hard or soft cost attached to them, either receiving or sending.

excalpius said,

Each SMS costs the telcos exactly NOTHING. It's being carried as part of the normal handshake required of all cell phones.

In other words, the phones have always been sending the same messages all of the time. It's just that now the empty space is filled with YOUR text instead of theirs/random.

Every penny you have ever paid for an SMS went to the phone company as pure profit. There was NEVER any hard or soft cost attached to them, either receiving or sending.

Not correct, how many times does this need explained. The control exchange never went anywhere than to the nearest tower. Now you have a directed message that needs to be exchanged to another handset, anywhere in the world, on any carrier. It is maybe $.03 worth of exchange, but it is still there.

Chook said,

This is hilarious. I live in Australia and I just read an article about our telcos being banned from using the term 'unlimited' or 'cap' because its never actually true... you guys have it so easy in the US. We have always paid 25cents per sms, 1.50$ for each minute you call and you only get about 500mb a month unless you want to end up paying in gold.

So count your blessings, Americans. Most Aussies would kill for anything like unlimited call/data/texts/ anything!

So maybe you should work harder on getting your country to the optimal state instead of shaming people into complacency so that every country may be in crappy shape just like Australia (in this regard)