LTE option poses data dilemma for iPad, smartphone users

Costs of using fast cellular networks push users to Wi-Fi

The new iPad's LTE option, which allows access to fast 4G networks, has also shocked some customers who found they can eat up an entire month's worth of data watching just a couple hours of streaming video.

For a long time, analysts and even carriers have urged customers to download videos and other large files over Wi-Fi to avoid the high price of using a cellular connection .

But that hasn't stopped owners of the new iPad and some recent LTE Android-based smartphones like the Samsung Galaxy Nexus from leveling renewed criticism at carriers like AT&T and Verizon Wireless for imposing high data fees.

In December, Computerworld illustrated the problem by downloading a single 128-minute HD movie over LTE to a Galaxy Nexus. The 3.7GB movie file took less than two hours to download .

The new iPad adds a whole new level of temptation, since it features a high-resolution 9.7-in "Retina" display with 3.1 million pixels, making it a great way to view everything from movies to online games to televised sports. A fast LTE network offers a consistent connection for streaming video and faster download capabilities than 3G networks.

Data price plans for tablet users start at $30 a month for 3GB of data on AT&T or 2GB on Verizon. Using that pricing model, a single HD movie download would cost $50 over Verizon (the $30 plan for 2GB, with two $10-per-GB overage charges) or $40 on AT&T.

As a result, some customers are asking: Why have a great new smartphone or tablet running over LTE if you can only watch video for such a short amount of time?

"People aren't going to stand around forever and just deal with limitations on data usage, and it's not incumbent on the user to monitor his own bandwidth consumption," wrote Erik Fecher in a comment on Computerworld . "It's completely the responsibility of the service provider to accommodate it."

The Wall Street Journal this week also found new iPad customers who quickly zipped through their respective data plans, with the issue generating similar comments .

Neither Verizon or AT&T wanted to comment about data usage costs. However Verizon did offer up a number of "tips" via email for consumers seeking "to manage their data allow allowance on...any mobile device."

The Verizon tips, not surprisingly, include using "Wi-Fi to help extend the life of your data plan" at home or elsewhere. "Checking email is not a huge use of data, but streaming video is, so you may want to use Wi-Fi when streaming video," Verison said.

The carrier also has a data calculator , and urges users to download a data widget for Verizon LTE tablets running Android. The widget is currently not available for the iPad.

The wireless industry clearly sees the need to protect their networks.

"Carriers need to keep the data usage rates fairly high to avoid being overwhelmed by the users of these these content-crazy devices," said Jack Gold, an analyst for J. Gold Associates. "So I wouldn't expect carriers to be making data more attractive anytime soon."

Rob Enderle, an analyst at Enderle Group, said the "core of the problem is under-capacity of networks.... If you are a carrier basically selling more [bandwidth] than you have, you aren't really motivated to reduce prices, because that would drive up demand and you already don't have enough."

Enderle, Gold and other analysts said many consumers already avoid buying LTE and 3G tablets to keep their costs low, resorting to Wi-Fi-only devices.

Just one in 10 tablets sold uses a cellular connection, analyst Chetan Sharma reported this week. Many tablet owners already have a smartphone and don't want to pay for both services, he noted.

The controversy has raised a number of possible scenarios for carriers. One approach would be to set up family and company group plans in which 3G or 4G wireless data use for a given month is shared across a group of people and their various devices.

"I do expect to see data sharing plans [from carriers] by the end of the year or early next year," Gold said.

Another approach would wrap the data costs of an online app, movie or sporting event into the overall cost of the app. Carriers could meter this data by using technology similar to 800 calling services where the vendor pays for the data. On-demand wireless video services are already emerging that include the cost of data.

Currently there's not a mechanism to allow an app provider to include the cost of data usage when selling an app, Enderle said. But Amazon's early e-reader devices -- not the Kindle Fire -- do allow users to download a book with the wireless download cost bundled with the book. "Eventually, some apps will have connectivity as part of the package," he predicted.

A third approach is emerging: cellular-to-Wi-Fi roaming technology, which would make it seamless for a tablet user on 3G or LTE to roam onto a Wi-Fi hotspot .

Carriers aren't expected to allow their customers to roam to Wi-Fi from cellular totally free, but it isn't clear how much they would charge, analysts said.

The Hotspot 2.0 technology initiative has begun a second round of testing smartphones, tablets and laptops with embedded software that handle secure and seamless cellular-to-Wi-Fi handoffs, said Niels Jonker, CTO of Boingo Wireless. Boingo runs hotspots in many airports and sits on the board of the Wireless Broadband Alliance, which is promoting the Hotspot 2.0 initiative.

Jonker said software updates for existing phones and software embedded in new phones will be available in the early part of 2013. "The time to mass adoption is pretty close, not five years off," he said.

The handoff from cellular to Wi-Fi with Hotspot 2.0 would work over smartphones and tablets and laptops and "would be fully automatic and part of a customer's plan," he said.

"The cellular carriers are very much into this, and are motivated," he added. "They understand full well that there's no way they can service a crowded place like a stadium of full of people taking and sending photos at once in any other way [than with Wi-Fi] and even LTE won't scale to do that for them."

Jonker said it is ironic how the large carriers describe LTE as offering so much more overall network capacity, but continue to testify to the Federal Communications Commission about tehir need for more spectrum. While Cisco has estimated there will be a 27-fold increase in wireless data growth in the next two years, LTE is expected to only add a five-fold increase over the prior wireless network capacity.

"We need a bigger solution such as Wi-Fi offloading, and there's not a carrier not on board with that," Jonker said.

As to whether Wi-Fi offloading could potentially cut into carrier revenues, Jonker said that the biggest economic consideration for carriers should be to "keep their users happy. And they can't build out their [cellular] networks cheaply enough to do that."

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed . His email address is .

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Copyright © 2012 IDG Communications, Inc.

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