Smart Data Pricing: To Share or Not to Share
CTN Issue: September 2014
A shared data plan is one where the usage price and/or quota for a single account covers data consumed across multiple devices and/or multiple users. “Family plans” currently advertised by service providers are a representative example, and offer an appealing (to some) alternative to the conventional model of one data plan per device. It is natural to ask under what conditions a service provider finds profit in offering such plans to its customer base.
This paper compares “bundled” (shared) data plans with “partitioned” data plans in a simplified market environment with a single (monopolist) service provider, servicing an idealized population of independent users, each of which owns two wireless devices (say, a smart phone and a tablet).