T-Mobile?s expansion of higher speed networks to 50 markets will drive up bandwidth use at the same time that the company is eliminating unlimited data plans.

The nation's fourth-largest wireless carrier this week introduced tiered pricing data plans, following similar moves by AT&T and Verizon Wireless. While the new pricing is likely to affect only a small portion of users, anyone in the mobile value chain will be watching to see the effect now that almost all of the major carriers have switched to tiered pricing.

?The tipping point in the industry seems to be moving toward tiered-pricing plans, driven by a subsegment of users who use up bandwidth,? said Josh Martin, senior analyst for WMS at Strategy Analytics, Newton, MA. ?If companies are already concerned about bandwidth constraint, it is only going to get worse.?

If the AT&T, T-Mobile deal goes through, for instance, the iPhone will likely become available on the T-Mobile network since a lot of the talk around the deal is about the two companies sharing network resources.

?The iPhone is great for network-heavy engagement of users,? Mr. Martin said.

T-Mobile said this week that it will offer four different monthly data plans with caps at 200MB, 2GB, 5 GB and 10GB. Users who go over their cap will be moved over to a slower T-Mobile network.

Video use an issue
Increasing use of bandwidth-hogging activities such as video is also likely to affect bandwidth constraint.

?As consumers use connected devices to stream media, you need more bandwidth to make that experience a good one,? said Noah Elkin, principal analyst at digital intelligence firm eMarketer, New York.

Recent research by Strategy Analytics shows that consumers are not currently consuming that much video via mobile devices.

However, Mr. Martin predicts that video use is likely to increase as faster networks become available.

?For all the talk about video, and while it will be an important driver for the future, the Web browser continues to be the major way that consumers use their devices,? Mr. Martin said.

One challenge facing the industry as pricing and data usage evolve is that consumers have no idea of how much bandwidth they are consuming with activities such as watching video.

If consumers perceive that rich media ads and other marketing activities affect their consumption of bandwidth, and that they are paying to watch ads, it could have affect mobile advertising.

?But I don?t think there will be a direct correlation between these two for a while, if ever,? Mr. Martin said.

?Consumers are often unwilling to do things like watch a video if they are not sure how it will affect their bill,? he said. ?Often times they err on the side of underestimating their use instead of overestimating it because they don?t want to get a big bill.?

Data caps are becoming the standard as consumers and businesses increasingly rely on the Internet and cloud-based services for their media consumption.

?I don?t think we?re at a point yet where the majority of people will exceed the data caps,? eMarketer?s Mr. Elkin said.

However, as more carriers move toward 4G, with higher bandwidth and higher speeds, the question will be whether the caps and the current pricing will have to evolve.

?It?s sort of a dog-chasing-its-tail process,? Mr. Elkin said. ?We have faster devices with more memory and faster networks with more bandwidth but, all the activities that use more memory and bandwidth fill whatever space is available.

?The impact [of increasing bandwidth use] won?t be felt today but all the participants in the value chain are going to be watching very carefully for a potential impact on their business,? he said.