Saracco, a senior member of the Institute of Electrical and Electronics Engineers (IEEE) and the director of the Telecom Italia Future Centre, said during an interview Tuesday that the major reason carriers are placing data caps on their LTE services is to prevent users from going exclusively with wireless data services and ditching their landline connections.
“You’re always going to want to make the maximum amount of value,” he said. “And you don’t want to have your fixed-line network being cannibalized by mobile.”
Saracco also said that while carriers have been marketing LTE for its bandwidth and download speeds, the real benefit of LTE is that it provides users with a native IP connection, which in the long run will provide cheaper wireless connectivity for users than previous cellular technologies such as HSPA and EV-DO.
This may seem somewhat counterintuitive given that carriers are currently charging a premium for LTE services. Saracco said carriers are able to do this because they’ve successfully marketed LTE as a game-changer in terms of providing data speeds to smartphones and tablets. However, Saracco said most smartphone users don’t require LTE-level data speeds to meet their needs and predicts that consumers will start to pay less for LTE connectivity once more competitors hit the market.
“My feeling is that if you’re using a smartphone you’re never going to need this kind of [LTE] speed,” he said. “It’s a different story if you’re using a dongle on your laptop and you’re downloading a really big file.”
The wireless industry has been moving away from all-you-can-eat data plans over the past couple of years and toward tiered service plans that place caps on monthly data consumption.