Experts Say Mobile Internet Rates Likely to Rise

Bob Preston
LOS ANGELES — Mobile Internet data rates are likely to rise in the near future.

This analysis comes on the heels of news that mobile voice rates are falling. According to CNET News, Spring Nextel plans to roll out a $69.99 monthly rate. A price war among the major carriers is also likely, and even though that will be good for consumers, it’ll mean trouble, too.

To make up for the money they’re due to lose on voice services, mobile carriers will likely pump up the prices on Internet service.

"Voice revenue is declining for the carriers," said analyst Charles Golvin of Forrester Research. "And the vision for the future is to use data revenue to make up for the shortfall and to kick [average revenue per user] into growth mode."

Consumers are primed for these price increases. Most mobile carriers offer catch-all data plans at large flat rates. AT&T, Verizon and T-Mobile all offer data plans that range in price from $30 to $40, and those are in addition to their rates for voice services.

These data plans promise big things but don’t always deliver. Spring Nextel claims to offer unlimited data for a flat rate, but there’s actually a 5GB cap, above which consumers get charged extra fees.

And users are dialing up the Internet more and more on their mobile devices. In the second quarter of 2009, AT&T saw a 37.2 increase in usage, while Verizon’s usage went up 52 percent.

Text messages also kill consumers. Even though it’s widely known that delivering text messages costs carriers very little, they all charge a premium for it. If songs costs as much to download as text messages cost to send, one track would cost more than $5,000.