Let me start with an obvious and uncontroversial observation: Not only has mobile broadband grown to become a consumer service with a high stickiness (subscribers may churn to a different provider, but they hardly ever give up mobile data once they get used to it, even during tough economic times), but users own an increasing number of connected devices. Not only do they own more consumer electronic devices, but also a higher percentage of them has wireless connectivity. Many of the new devices--e.g. Kindle or iPad--would have not been commercially viable without wireless connectivity.
Yet, even though all the devices we own can connect to the same Internet, at the edge they mostly sit isolated from each other. Not only is it often frustrating to synch them, but we still need to negotiate for each device a way to establish connectivity as soon as we step out of our house or office.
Wi-Fi has been a great enabler for the coexistence of multiple devices by creating a common platform that can be shared by most of the devices with wireless connectivity we own. When moving outside the Wi-Fi cloud at home, office or in hotspots, users would like to remain connected using wireless broadband, but connectivity for multiple devices on cellular networks can be complicated--and expensive--to manage.
Hesitation by operators
Cellular operators have been very reluctant to embrace and encourage the proliferation of devices. Across all operators, service plans for both voice and data are about devices--not subscribers. Even family plans count the number of phone lines, not the number of people using the service. In the common scenario, a subscriber who owns a laptop and a smartphone would have to set up and pay for two different contracts to have a connection plan for both devices. Want to connect your iPad to the 3G network? That's another contract, and another monthly fee.
There are some workarounds. You can use your phone as a modem and have a tethering plan that allows you to get connectivity on your laptop. It is a useful feature, but establishing a connection is slow and somewhat inconvenient. Clear offers a contract for two devices (one desktop modem and a mobile modem) but this is really a bundled service (i.e., fixed and mobile broadband) rather than a way to support a wide range of devices. Alternatively, some operators support connectivity to multiple devices through Wi-Fi. The laptop, smartphone or a separate device (e.g., Clearwire's iSpot) establishes a cellular connection that is then shared with the other devices that do not have separate cellular connectivity. The advantage of this approach is that you can connect devices that do not have a cellular interface--as long as they have Wi-Fi, which is typically the case. Operators do not need to subsidize the devices; subscribers do not need to worry about SIM-locked devices.
Isn't this good enough to satisfy users with multiple devices? The cellular/Wi-Fi local hotspot solution is an easy-to-implement and flexible solution, but it is best suited for a limited segment of early adopters, willing to go to great lengths to be fully connected. It is a solution that meets the requirements, but it does not aggressively try to capture the larger consumer market--or in fact to create a multi-device consumer market.
The main limitation with the cellular/Wi-Fi approach is that it is based on a dominant device that the subscriber has to carry along to provide connectivity to the other devices. While this has been the case for most usage scenarios, this is rapidly changing. Subscribers may have an embedded laptop and iPad or netbook and may want to carry with them only one. If the connected device is the smartphone, using it as a local hotspot can be done only for short periods of time because of the battery life limitations of smartphones. Furthermore, if a subscriber with a smartphone and a laptop has to choose only one device to be connected to the cellular network, the smartphone is most likely selected, but when using the laptop the subscriber would typically have a better experience if connecting directly from an embedded laptop which has a better antenna.
In the long term, however, even more complex scenarios where subscribers have more than two devices, phone and laptop, but do not have them all with them or all on at all times will dominate. For these subscribers, a device-based plan is not in synch with what they need. Setting up multiple contracts and managing multiple connections is a complication that will discourage both the adoption of devices and use of their connectivity features. Multi-device subscribers need a plan that is tailored to fit their overall individual requirements for a service-connectivity--for which they may use different devices at different times and in different places.
There are some interesting examples of how operators can offer to their subscribers plans that allow multiple devices, while keeping usage and fraud (i.e., sharing an individual account across multiple users) under control.
In Singapore, Singtel has offered for some time multiple SIM cards. All SIM cards are linked to the same phone number--i.e., all the devices within the account can receive calls to the subscriber's phone number. The advantage to the subscribers is that they can have a concurrent voice and data session on two devices. The limitation (and protection to the cellular operator) is that only one voice call and one data connection can be active at the same time. If desired, operators could add a further restriction and allow calls and data connections only if they are generated from the same location.
Of course this can be implemented without SIM cards. In Japan, the WiMAX operator UQ allows its subscribers to use multiple devices. However, only one device at a time can be connected.
Why are service plans centered on the individual needs of the subscriber, rather than on the device, so rarely offered? I have asked this question to many operators and device vendors over the years.
The most common answer is that they do not see sufficient demand for this type of service plan. However, I would argue that without plans that encourage multi-device connectivity, subscribers will not be tempted to spend the money to buy an embedded device. Many users prefer dongles to embedded laptops only because they can use the dongle on any laptop they choose (or share it with colleagues). Many iPad owners do not see much point in paying an additional $15-$25 a month for 3G connectivity. Effectively, however, they may use the same bandwidth to download data to another device and then transfer it to the iPad. Their bandwidth consumption may not change much (and therefore they may find it difficult to justify the cost of an additional data plan), but they would probably find it more convenient and enjoyable to download content directly to their iPad.
I hear fewer and fewer operators claiming that there is no demand for multi-device plans--and this is an encouraging sign, especially as wireless operators have started to experiment with a wider range of service plan options, including more flexible pre-paid offers, or choices between capped and uncapped plans, with more low-cost plans aimed at attracting new users. A tailored multi-device service plan will increase the perceived value of the service and enable the operator to increase revenues, while at the same time increasing the stickiness of the service (it is easier to migrate one device than many of them). A proposition to the subscriber is transparent, clearly articulated, and fairly priced may convince many of the iPad users that 3G connectivity on the iPhone is no longer enough.