Companies attract mobile visitors by picking up the tab for data costs

Companies attract mobile visitors by picking up the tab for data costs
Companies like chocolate manufacturer Hershey, ticket re-seller StubHub and Hotels.com, are turning to a new model to attract mobile users to their sites. These companies are willing to pay all data costs, or offer extra data to those willing to view a movie trailer, sign up for a free trial, or visit a company website. This practice could help those deep-pocketed firms willing to pay mobile carriers, gain an advantage over the competition.

It is the possibility that the rich can get richer, that has U.S. regulators cautious about this practice. A new service starting this week, called Freeway, allows AT&T customers to visit certain mobile sites without it counting against the user's monthly data allowance. Companies that have signed up to participate include StubHub.com and Expedia.com. Freeway users can also view a movie trailer for "Frank vs. God" without using up any precious data.

The reason why a company like Freeway might capture a lot of attention, is that Americans are spending more on data. The average American family spent a total of $913 on cellphone service in 2013, up 50% since 2007. One in five households spent over $1400 for service last year. And according to the nation's largest carrier, the average Verizon customer is spending $161.24 a month for cellphone service. That is a 3.5% increase over last year.

It isn't just postpaid subscribers that are being bribed with free data. A new service called Kickbit, offers customers of prepaid carriers extra data if they sign up for trial offers. For example, one recent offer gave those with a prepaid account 200MB in data that can be used anytime, if they signed up with Hulu for a free 7-day trial.

Next week, visitors using AT&T's pipeline to visit the mobile app of humor site Break.com, will not have the data they use to visit the app counted against their monthly data cap. Will "no data charge" become the next "no shipping"? It all depends on whether the promotions prove to be successful in attracting visitors.



source: WSJ

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3 Comments

1. DurTeeDee

Posts: 151; Member since: Sep 05, 2014

poor net neutrality I miss you

2. Augustine

Posts: 1043; Member since: Sep 28, 2013

Ah, yes, the cute myth of net neutrality, or however someone's pet peeve is called. It never existed in wholesale, therefore not in retail either. Interconnect and peering was never free and the quality of the service is part of the terms of the contract. This means that a small backbone operators never got the same deal for routing, latency or bandwidth from a large operator as other larger ones did. Besides, the backbone is an operator's property and, if one is keen on protecting his right to property, he cannot but support that the operator does as he pleases with his property. If his actions impacts us consumers, we are free to vote with our wallet.

3. cripton805

Posts: 1485; Member since: Mar 18, 2012

I can't wait until the prices drop for service. The rates have been ridiculous these past two years. The loophole for buying the phone in payments instead of using an ETF was pretty smart. If someone chooses to terminate their contract, that means they end up owing more. Consumers really need to research costs for service, phone pricing, and access fees to determine whether it's better to be on contract or off. Each carrier is so different. I always thought Verizon's "Device Access Fee" was a complete joke.

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