Success Of Flat-Rate Data Plans Could Lead To Network Disaster: Report
By James Quintana Pearce - Tue 08 Apr 2008 03:09 PM PST
A strong uptake of flat-rate voice and data plans will create capacity problems on 3G networks and backhaul systems, predicts ABI Research. The analyst warns that increased use of SMS may not only flood the network and impact its ability to deliver voice signaling, but that flat-rate plans “may spur text message spamming”. I’m not sure about spurring SMS spamming, since anonymity is a major requirement...even if spammers get the contracts anonymously the carrier can cut them off when it detects the spam, and replacing the service is going to increase the cost significantly. The report warns that the flat-rate plans have the potential to increase customer churn because of the degradation of the network—but admits that at the moment they generally succeed in the carrier’s intention of decreasing customer churn. While the release is a bit alarmist—I think having too many people using data services is a problem carriers dream of having—it does mention the examples of Korean telcos SKT and KTF, several years ahead in terms of uptake of services, which have both been the subject of recent reports of a degradation in the quality of their voice network. I think the plans of the US carriers to upgrade their wireless networks will kick in before enough people take up the plans to cause a problem, but upgrading the backhaul system is a bigger job they may not have thought of. (release)
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