Globalcomm: RIM CEO argues against unlimited wireless data

CHICAGO--Research in Motion President and co-CEO Mike Lazaridis kicked off Globalcomm today with a plea for wireless carriers to reel in their data plans, warning them they risk becoming mere “bit pipes” if they continue offering raw bandwidth rather than specific services.

Unlike the wired broadband world, the wireless network still has enormous capacity constraints that necessitate carriers severely restricting the amount of data allotted to each user. The amount of gross capacity a carrier can offer over a network has a definable ceiling, he said, but the amount of data applications can access is unlimited. If the industry doesn’t discourage unbounded use of data capacity, it will effectively be giving up its revenues.

“We have to make sure we’re offering the right incentives,” Lazaridis said. “Otherwise we’ll fall into the trap of carriers becoming bit pipes. … This is something we have to be very cognizant of as we release wireless data onto our networks.”

Lazaradis cited the success of RIM’s own BlackBerry service as an example of such a tailored service, pointing out that average payload downloaded by BlackBerry user is about 2 MB per month. From BlackBerry’s inception, RIM created the service to sparingly access the network, downloading only part of messages during the initial push transmission and restricting attachments.

Mike Lazaridis, RIM president and co-CEO

Lazaridis then contrasted that with a PC-card driven unlimited data plan, the average user of which draws 1.8 GB of data a month for a price not that much higher than a BlackBerry service plan. The major carriers have dropped their unlimited 3G download plans from $80 to $60 a month for PC cards, and Sprint has even begun offering a $40-a-month plan for use of a phone as an EV-DO modem.

Comparatively a wireless customer with a 500-minute voice plan is using the equivalent of 21.38 MB of capacity, leaving a huge gap between the revenues drawn from 1 MB of voice capacity versus 1 MB of data capacity, Lazaridis said. If carriers are to continue sharing their network with voice and data, they have to even out the disparity, Lazaridis concluded.