Improved Data Pricing for Programmable Wireless

April 17, 2018
Written by

Twilio Bug Logo

As announced earlier today, Programmable Wireless is now Generally Available. As part of the GA release, we’re introducing improved data pricing and new data pricing models.

Major Changes

  • We are reducing the “Pay as you go” data pricing rate to 10¢ per MB in 120+ countries.
  • Customers on the existing “Pooled” data plan will automatically receive the discounted PAYG pricing.
  • We are introducing new Quota-based pricing plans for higher volume use cases (see below).
  • Customers on the existing “Individual” data plan can continue to use it, but will save an average of 15% by moving to an optimal Quota-based data plan.

The challenge of IoT connectivity pricing

Creating customer-centric pricing plans for global IoT connectivity is difficult for two reasons:

  • Many IoT devices use very little data, but some IoT devices are data hungry. In a given month, a high consumption device like a camera can use 100,000 times more data than a low consumption device like a temperature sensor.
  • IoT devices are deployed all around the world. Even more challenging is that a subset of devices travel across borders during the month (e.g. GPS trackers).

To sustainably support high and low consumption use cases, it’s necessary to price them differently. For example, some providers offer a 1GB plan that costs less on a per-megabyte basis than a 1MB plan.  But this strategy creates a new problem – in what countries can the 1GB be consumed? Often the answer is to limit access to a small list of countries and set the price so that it covers the most expensive country in the list (lists are often called ‘zones’). But then what happens if a device travels between zones in a single month? You might find that all data usage is billed as if it were consumed in the most expensive zone. Yuck.

Introducing Quota-based pricing
We wanted to take a different strategy – one that optimizes global pricing in the best interest of our customers.

For ultra-low usage devices, we continue to offer a pure “Pay as you go” plan – pay only for the data you consume, with byte-level rounding and no minimum data spend per SIM. Today, we’ve priced our PAYG plan at 10¢ per MB in 120+ countries.

For higher usage devices, we’re introducing Quota-based data pricing plans. With a Quota-based plan, instead of agreeing to purchase a specific amount of data (in byte terms) for your SIM, you agree to a minimum data spend, or “Quota” level. In return, we give you the best possible rates in every country, discounting more heavily for higher Quotas.

Even on a Quota plan, data is still priced per megabyte and billed with byte-level rounding. But at the end of your SIM’s billing month, you either pay for exactly what you consumed, or the Quota price, whichever is higher.

Let’s work through an example of a mid-consumption IoT use case:

  • Let’s say your use case necessitates 400MB per month and your fleet will be deployed in the USA and Mexico.
  • At the time of writing, with our new $10 Quota plan, USA data is 2¢ per MB and Mexico data is 5¢ per MB.  
  • A given device consumes 400MB exclusively in the USA, its data bill works out to (400 x $0.02 = $8). Because this is less than the minimum data spend specified by the $10 Quota, you would pay $10.
  • Another device consumes 200MB of its consumption in the USA and the other 200MB in Mexico. Its data bill works out to  (200 x $0.02 = $4) + (200 x $0.05 = $8), for a total of $12. Because this exceeds the minimum data spend specified by the Quota, you’ll pay for exactly what was consumed: $12 in total.

A Quota for each use case

For our self-service pricing, we are offering three Quota levels: $1, $10 and $50. Our intent is that these plans respectively solve for “IoT” (think sensors and actuators), “Broadband IoT” (think digital signage),  and “high-usage multimedia devices” (think cameras). To help you estimate the best Quota plan for your use case, we’ve added a calculator to the Wireless Console (requires login).

How exactly is data usage metered and billed?

This is covered in detail in the Programmable Wireless documentation.

What about SMS and other modalities?

Today, Quota plans apply only to the data component of your bill. As previously mentioned, high data-consumption devices can consume many orders of magnitude more than low data-consumption devices – an observation that doesn’t appear true for SMS and other aspects of a SIM’s monthly bill.  Commands, Programmable SMS and Programmable Voice will continue to scale linearly based on usage, and are priced per country.

Feedback? We’d love to hear it. We recognize that Quota based pricing is a bit more to wrap your head around, but we strongly believe that it will enable developers to deploy and scale global IoT solutions.