Flat Rate? 50 Million Free Minutes? What's The Difference?
By Mike Masnick, Sat Aug 07 00:00:00 GMT 2004

The press is making a lot of noise over a report claiming people don't use their mobile phone plan's minutes. Maybe that's because no one is supposed to.


Watch out everyone, you might be wasting your mobile phone minutes! At least, that's the impression that a new report is trying to give. The report makes it clear that a "whopping 78%" of mobile phone plan minutes are never used and goes on to suggest that many people would be better off with a pre-paid plan. Meanwhile, others are taking the study as a sign to the mobile operators that it's time to stop these billion-minute (but only on nights and weekends and ever other Tuesday) plans and simply offer true flat-rate plans so consumers know what they're getting.

While this report is clearly a ploy to get more users to sign up for pre-paid plans, some of the responses to it seem to doubt mobile phone subscribers' ability to understand what it is they've subscribed to. Just like the great 1,000 hours per month offers from AOL, most users know when they sign up for plans that offer thousands and thousands of minutes (even with a "rollover" feature) that they're really buying the security of a flat-rate plan, and not the minutes.

Very few users are out there worrying about not having used up their minutes. The opposite is much more likely. There are so many plans with minute levels beyond what a normal person could ever use, that it's clear such plans are really flat rate plans, with a sprinkle of marketing dust to throw some numbers into the works to make the plans seem different. Subscribers don't buy huge numbers of minutes to use them all up, but, quite the opposite, because they know they'll never use them up. That makes them feel more secure, knowing they never need to worry about variable pricing on a month to month basis. In the early days of dialup internet service, flat-rate pricing won out over pay-as-you-go because it encouraged usage and made it so users didn't have to worry or watch the clock. There's a "price" for not having to worry and it's all those extra minutes. Most subscribers seem perfectly fine with that.