First US EV-DO Carrier To Shut Down
By Carlo Longino, Mon Mar 08 16:15:00 GMT 2004

Monet Mobile is pulling the plug on the 1x EV-DO data network it launched in 8 midwestern US cities in October 2002. Does this condemn US mobile data?

Monet's going down the path traveled by several wireless-data startups before it like Metricom and Mobilestar, unable to sustain itself as a data-only mobile carrier. While the company's failure may not be that remarkable, the implications may be.

The carrier's service cost $40 per month, with a $100 modem required, and delivered 300 to 700 kbps, with roaming allowed throughout Monet's coverage area. On its face, it doesn't sound like a bad service, but why couldn't the company attract enough subscribers to stay afloat?

My first reaction is to question the "if you build it, they will come" line of thinking that permeates the industry. Here's a company that had no direct competition for a year and a half, had an attractive, reasonably priced service, and couldn't make it work. This seems to damn predictions for at least the midwestern American appetite for mobile data.

Or does it? Verizon doesn't think so, they're still planning to take their EV-DO network nationwide. AT&T has launched EDGE coast-to-coast, and Nextel is running OFDM trials.

The problem that carriers like Monet and Metricom encounter, perhaps, is that they only handle data, requiring customers to get yet another account and pay yet another bill. In the US, data is for the most part seen as a value-add to voice service, which still accounts for at least 90% of wireless use.

Wireless data on its own remains an unproven proposition with a less-than-enviable track record, and often sees carriers competing in customers' minds with ISPs, no matter how unfair the comparison. For what a Monet subscriber pays each month, they could likely get cable-modem or DSL service that's 4 to 10 times faster. And if they're already paying that at home, plus another 50 bucks a month to their voice carrier, $40 for wireless data is likely to seem an unnecessary extravagance. Throw in the disruptive influence of free and cut-rate Wi-Fi and it pales even further.

But if carriers add data alongside voice -- and keep the price reasonable -- they stand a much better chance for success. I pay my carrier, T-Mobile, $5 per month for unlimited GPRS and use of their T-Zones WAP portal, and I'm using mobile data more than I ever have, far more than when I was on another carrier and had to keep an eye on a data counter, lest I go over my 1-megabyte allowance. I also just added unlimited use of their Wi-Fi hotspots for $20 per month. While it's not something I use a lot, the cost is low enough that I'll pay for it just so I don't have to cough up 1-hour or day-pass fees if I want to sit in Starbucks for a while and do some work.

I could have subscribed to T-Mobile's Wi-Fi service before I used them for cellular at double the rate, but the outlay and hassle of another account and bill didn't seem worth it to me. But at a lower price, and with the billing and login integrated with my mobile phone service, it's so much more attractive. The same is true for wide-area mobile data. It stands a far better chance for success when it's offered as a part of an integrated package, rather than standing on its own.