Prepare to open your wallets, smartphone users. Next month, Verizon (NYSE: VZ) will stop offering unlimited data to new mobile users, joining AT&T (NYSE: T) and T-Mobile in switching to tiered service that matches pricing to usage. Plans will range from $30 a month for 2 gigabytes of usage up to $80 a month for 10 gigs of data, Droid Life reports. A Verizon executive later confirmed the reports of new tiered data plans.
Sprint Nextel (NYSE: S) remains the lone holdout with a $50 per month unlimited data plan for 4G mobile users. Interestingly, AT&T is toying with similar pricing for an unlimited plan tied to its prepaid GoPhone service, The Wall Street Journal's All Things Digital reports. Users will undoubtedly mourn the death of unlimited data plans, especially so when Netflix (Nasdaq: NFLX) and other streaming services fix their issues with Google's (Nasdaq: GOOG) Android operating system.
All told, Cisco expects mobile data consumption to rise 26-fold between 2010 and 2015. With unlimited data plans dying, all signs point to telcos needing help handling the increase. And that's where Boingo Wireless (Nasdaq: WIFI) comes in.
Boingo turned few heads when it went public last month and at today's price of roughly $8.50 a share remains off almost 40% from its debut at $13.50 a share. Analysts don't see much upside over the short term. I disagree. Wi-Fi networks will handle the inevitable spillover from a rising tide of mobile data, and Boingo, with more than 325,000 hotspots worldwide, manages more Wi-Fi than anyone else. Verizon happens to be a customer, as are BT Corp., Skype, and MetroPCS Communications (NYSE: PCS).
Wi-Fi may not be as sexy as 4G WiMAX or LTE delivered via satellite, but it's still fast, cheap, and widely accessible. As the Wi-Fi leader, Boingo fills what the research suggests is a large and growing data delivery gap between mobile users and telco networks. I've rated the stock to outperform in my CAPS portfolio as a result.
Do you agree? Disagree? Weigh in using the comments box below.
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