Is sponsored data dead in the water?

Mobile operators are famous for coming up with new and interesting business models and schemes to try to siphon customers away from the competition. T-Mobile’s ‘Uncarrier’ initiative is a great example, as is Sprint’s seemingly constant revamping of its family plans. AT&T is also making bold moves, most recently with its rollover data plan that automatically sends unused bytes from one month over to the next, with the catch that it expires after one month.

But another one of AT&T’s bright ideas hasn’t been received with open arms: sponsored data. The concept is relatively simple: Customers can get access to mobile data services without eating into their plan’s data allotment. The idea is for AT&T to team up with providers who would sponsor certain types of content or offers – such as apps and videos – that customers could take advantage of free of data charges.

It’s sort of like Amazon’s Kindle with special offers, but instead of a subsidized e-reader you get subsidized mobile data.

Looking at the business model, you’d think companies would be beating down AT&T’s door. They get downloads and eyeballs on their content, while customers don’t have to worry about maxing out their data cap. Unfortunately, what sounded like a slam dunk for AT&T has turned into huge missed opportunity.

One year on from its January 2014 launch, AT&T’s sponsored data initiative has yet to capture the interest of many in the industry. The operator has only managed to sign up 10 sponsors, most of whom aren’t exactly household names. While Liberty Mutual insurance company is on the list, so are lesser known partners such as Aquto, DataMi, HipCricket, LotusFlare and Syntonic Wireless.

In an interesting twist, Syntonic’s participation in the sponsored data program has opened a can of net neutrality worms due to questions about whether this sort of ‘free’ access to bandwidth violates the principle of all data being treated fairly. Critics argue that sponsored data could be perceived as getting preferential treatment.

Besides the net neutrality argument, companies that might have considered sponsored data could be put off by users relying more on Wi-Fi than ever, which would seem to negate the whole model of giving free access to videos and other content.

Regardless of the lack of uptake, AT&T isn’t showing any signs of putting its sponsored data plan on ice. And with data caps now the norm and all-you-can-eat a thing of the distant past, sponsored data – if done well – could help users extend their bucket of bytes and avoid the shock of overage charges.

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About Anita Karve 37 Articles
Anita is a writer and editor with 20 years of experience covering just about everything in the technology space with a focus on computer networking and telecommunications. She was managing editor of Billing & OSS World magazine and technology editor at Network magazine and most recently was in charge of newsletter coverage at TM Forum.

1 Comment

  1. Thanks, Anita – nice article. It’s commonly thought that AT&T was the first operator to launch sponsored data, but in fact this model has been widely deployed in China for years. App stores sponsor downloads, app developers sponsor data for their own apps, online stores give data as an incentive/reward when you but physical goods – the whole thing is completely mainstream. This is just one of many things we in the West don’t know about the level of innovation in the Chinese telecoms market; maybe it’s time we started looking East for inspiration:

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