Caught in a mobile data tug of war

(This story is part of Connected Planet’s Mobile Data Paradox microsite –  an ongoing collection of features, blogs and opinions on the key question facing mobile operators today: how do you make a business of 4G and mobile data?

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Verizon Wireless (NYSE:VZ, NYSE:VOD) has indicated usage-based mobile data pricing is in its future. Yet at the same time it is testing new cheaper unlimited plans that threaten to turn the mobile data spigot open wider. As the operator prepares for its commercial long-term evolution (LTE) launch later this year, it appears to be wrestling with the idea of how to charge for mobile data.

On the one hand, it wants to keep its customers happy (what operator doesn’t?), and judging from the backlash against AT&T (NYSE:T) after it introduced tiered pricing plans—plans that were actually cheaper and didn’t include onerous overage fees—capping customers’ data usage is not the way to make them happy. But if Verizon doesn’t start restricting data use, it found itself in the same predicament as AT&T, fighting to keep up with 1000%-plus data growth over a network that will be supplanted by 4G in a few years time.

Verizon may not have the iPhone, but it’s been releasing a steady stream of fancy Android phones, which have not only proved popular but each seems to outdo its predecessor in the sophistication of its data services. The Droid X is consuming five times the data of any other VZW data-enabled device. That probably has a lot to do with bevy of video capabilities and apps Motorola, VZW and their partners enabled on the phone. If Verizon isn’t experiencing the data tsunami that AT&T experienced after the iPhone 3G’s launch, then it will probably feel the force of that wave soon.

Knowing that wave is coming, what do you do? Do you give the customers what they want, knowing full well you might have to take it back?

Offering unlimited data plans for the iPhone got AT&T a whole bunch of customers, but it also created a lot of operational headaches and made AT&T’s network the butt of jokes. I’m sure VZW will get nailed by the tech media and consumer advocacy groups as soon as it institutes its first caps. Walking back its unlimited plans was no picnic for AT&T either, but ultimately was unfazed. The iPhone 4 went on to break records—capped data plans regardless.