The Wall Street Journal posted an interesting article today detailing how the iPhone and its many, many users have crippled AT&T’s network, and how their data related revenues will begin to decrease once the new user market plateaus. After outlining all of the usual information that we have already heard, they give a solution to the problem: stop offering unlimited data to smartphone users.
In the article they outline the usual numbers, like how iPhone users download games, video, and other web related data about two to four times more than other smartphone users. They also mention that iPhone users are more likely to use web-based applications and surf the Internet more. Because of all of the abilities and popularity of the iPhone, AT&T has had to keep spending money on upgrading their networks at an alarming rate, which actually ends up being about $9 billion last year on implementing new wireless spectrum (like 4G) and $6 billion annually on overall capacity. With the current new user market slowing down, where is all of the money going to come from? They surely can’t solely bank on data revenue, or can they?
The new networks should be more efficient, and once implemented, the payoff will be well worth the cost, but the difficulty is getting to that point. The Wall Street Journal states that the best short term solution would be to abandon unlimited data pricing plans, which would obvious help counter the costs of heavy users.
From a business standpoint, this is obviously the best solution, but it definitely wouldn’t be the easiest. The competition is already driving down the price of monthly service plans that include unlimited text, unlimited voice, and of course unlimited data. With all of that competition, AT&T would have a tough time convincing their iPhone users that this is the only solution left available. You also have to look at it from a user’s standpoint. If it wasn’t for the iPhone and all of its users, AT&T wouldn’t have nearly as much revenue or subscribers, so the iPhone users are already, in a sense, paying for all of those upgrades.
So what do you think, would it be fair for AT&T (or any wireless carrier for that matter) to charge heavy users more for their data plans since they are the biggest strain on the system?
A very complex and sensitive topic. I sure hope they don’t price by usage. I feel AT&T is already pushing some limits with requiring iPhone users to get a set data plan. No other handset has that requirement, that I know of. While I’m certain there would still be plenty lined up to add large data packages to their plans ( hasn’t stopped heavy SMS / MMs users ). With Sprint offering an unlimited everything plan for ~$100 / month compared to ~$150 if you were to configure your account similarly with AT&T ( for iPhone users, which doesn’t allow for PTT ). However, Verizon seems to have the same ~$150 for unlimited data, email, calling, and texting.
Install more AT&T wifi hotspots in high traffic areas, automatically have the phones route through wifi. Problem solved.
If the iPhone users are crippling the AT&T network, why is AT&T trying so hard to renew their agreement with Apple to be the SOLE mobile provider for iPhone users? It’s simple. They want to keep the iPhone users they have while upcharging based upon data usage. It’s a double-win that will help AT&T fund its future growth, at the expense of the consumer.
Fair competition between other mobile providers? Nay, says AT&T.
You could see the writing on the wall with AT&T finally introducing their iPhone app. I’ll stick with my iTouch and cheapie prepaid phone.
If they do this I’m done. They can sue me for the early termination and tie it up for a while. Bad enough they charge you for iPhone apps that are standard on any other phone, still charging for texts which cost virtually nothing. Fvck AT&T they can choke on the nickels and dimes they are stealing from us now.
If they quit having an unlimited data plan they will stop having me as a customer. I would imagine a lot of people would follow suit.
The iPhone plans are already some of the most expensive plans out onthe cellphone market. iPhone owners have had to put up expensive iPhone prices ($600 then $400). It took AT&T how long to “subsidize” the phone in order to get the price down to $199. My wife and I share an iPhone family plan for a whopping $170 a month. At this price we should be enjoying unlimited everything. Now AT&T wants totalk about how they at hurting and they can’t keep up. If they stop offering unlimited data, we will be royally pissed off and will certainly take take a had look at what the other cariers can offer us.
If AT&T can’t take the iPhone heat, then they need to step aside and let other cell carrier come and take a crack at it. Just my brutally honest 2 cents.
AT&T is going to do it and continue to do it because there are so many people who are like crack heads for the phone. They dont care all they know is that they want the phone and they are willing to do anything that they have to do to get it.