AT&T Plans to Charge Smartphone Customers for Heavy Data Traffic

I saw this article also in various news sources. But it was written differently. I read that those 3% were not singled out as iPhone users, but smartphone users in general.

Here is the same article in the NYTimes, a little more mellow. Sounds like they want to hit on the very heavy users first: the guys who stream pandora all day long...

"AT&T is considering ways to encourage customers to use less wireless data as its network struggles to keep up with demand, a company executive said Wednesday.

“What we are seeing in the U.S. today in terms of smartphone penetration, 3G data, nobody else is seeing in the rest of the planet,” Ralph de la Vega, president and chief executive for mobility and consumer markets at AT&T, told analysts at a conference in New York. “The amount of growth and data that we are seeing in wireless data is unprecedented.”

AT&T is the exclusive United States carrier for the iPhone, whose owners are big users of network capacity as they surf the Web and download videos.

The company has been criticized by owners of the phone for delayed text and voice messages, sluggish download speeds and other network problems.

Mr. de la Vega cited the heaviest data users, saying that 40 percent of AT&T’s data traffic came from just 3 percent of its smartphone customers.

But he emphasized that the company would first focus on educating consumers about their data consumption in the hope that doing so would encourage them to cut back, even though they are paying for unlimited data use.

“We’re going to try to focus on making sure we give incentives to those small percentages to either reduce or modify their usage, so they don’t crowd out the customers on those same cell sites,” he said.

The company might consider a “pricing scheme that addresses the usage,” Mr. de la Vega said. But he said that would be determined by regulatory factors and industry competition, among other issues.

Although the company declined to provide further details, analysts speculated that AT&T could be talking about a tiered pricing structure, not unlike a voice plan.

“You use more minutes, you pay more,” said Chetan Sharma, an independent wireless analyst. Mr. Sharma pointed out that carriers in other countries put data-use limits on iPhone customers to manage demand.

Still, Mr. Sharma said pricing plans based on use were only part of the answer to AT&T’s network congestion.

“They still have to improve things on the back end so they can deal with the issues of multiple users on the network at the same time,” he said.

AT&T has announced a goal of adding 2,000 cell sites to improve its network this year. And this week it released an iPhone application called Mark the Spot that lets users report data problems, dropped calls and spotty coverage.

All wireless carriers are preparing for growth in the use of smartphones and mobile computers that will place high data demands on their networks, said James Brehm, a senior mobile consultant with market research firm Frost & Sullivan.

“AT&T and other service providers want to be smarter about how they bill customers and maximize all streams of revenue, while growing the number of connected devices and data traffic at the same time,” Mr. Brehm said.

Mr. de la Vega acknowledged the company’s difficulties in meeting the demands of its customers, but said things were improving in some areas. “In New York, I think we’ve turned a corner,” he said."



http://www.nytimes.com/2009/12/10/technology/companies/10iphone.html?_r=1&ref=technology

 

This seems like AT&T trying to use a finger to plug a hole in a dam. Of course, they made that hole. The iPhone started something that's not likely to stop. Verizon's nearing the million mark on the Droid. They hyped these phones so they could sell higher priced data plans to consumers who wouldn't have purchsed smartphones, otherwise. iPhone commercials hype all of the apps, many of which use data to function.

They've taken a hit due to their own success and now are looking to penalize customers who played by rules AT&T set up. I understand they have the right to do this, but I don't think such an act will do them good long term. It might have been better to have done this before getting into a pissing contest with Verizon over "There's a map for that" ads. Isn't it essentially admitting Verizon's commercials are true and AT&T's rebuttal ads are false, at least in regards to public perception?

The dam's already broken. They need to fix the dam, not try to use a bucked to bail out of the flood.

 

AT&T: Tighter control of cell data usage ahead
By Peter Svensson, AP Technology Writer

NEW YORK — Wireless data hogs who jam the airwaves by watching video on their iPhones will be put on tighter leashes, an AT&T executive said Wednesday.

The carrier has had trouble keeping up with wireless data usage, leading to dropped connections and long waits for users trying to run programs on their devices. AT&T is upgrading its network to cope, but its head of consumer services, Ralph de la Vega, told investors at a UBS conference in New York that it will also give high-bandwidth users incentives to "reduce or modify their usage."

De la Vega didn't say exactly how or when the carrier would change its policies, but he said some form of usage-based pricing for data is inevitable.

Right now, the carrier doesn't limit data usage for smart phones. It also doesn't make it easy for subscribers to know how much data they're consuming.

"We need to educate the customer ... We've got to get them to understand what represents a megabyte of data," de la Vega said. "We're improving all our systems to let consumers get real-time information on their data usage."

Just 3% of "smart" phone users are consuming 40% of the network capacity, de la Vega said, adding that the most high-bandwidth activity is video and audio streaming. Several applications on the iPhone provide nonstop Internet radio.

De la Vega also defended the network's performance, saying testing showed that AT&T's third-generation, or 3G, network was faster than that of competitors, and that major problems are concentrated in New York and San Francisco, which are packed with smart phone users.

AT&T is locked in a TV ad war with Verizon Wireless, which is touting its wider 3G network coverage. The two recently agreed to drop two lawsuits about their dueling claims.

USA Today

 

"Oh we want more sales by shoving out more smartphones"
"Oh! You smartphone users need to pay higher data rates"
"Please buy a smartphone! Look! You can stream videos on 3G!!"
"Wait! You can't buy that phone UNLESS you get the unlimited data plan with it too!"

"Now that you have a smartphone we pressed onto you, and you are watching the videos we told you that you could watch, and how cool it was, now we must cut you off.

Didn't any of the head honchos think of this prior to pressing all this stuff on everyone?

I hate Verizon. TMobile sucks where I need to go too. If at&t screws with me, I will have to go to Sprint How depressing. GOD I miss Cingular!!!

 

I hope no other carriers follow in AT&T's footsteps... this is a step backward for the wireless industry.

 

Ha-ha, good break-down Thats where marketing meets technology meets financial bugets meets angry customers and theres a metltdown.

.....I got a one word magic pill for your headache: "LTE" ....Shizam! Babyyyyy!

 

It is unfair, what did AT&T expect when they embraced Apple with the iPhone?? Now because AT&T cannot handle the traffic, they want to punish the user.

 

I don't think anyone in the industry or outside of it predicted how successful the iPhone would be. If they could have predicted it...the other phone mgfr would have done it first.

I even know of a very famous industrial design professor, at a very well know university, that flatly said that no one want all of their gadgets (mp3, phone, computer, gps) in one little device.

Boy was he wrong.

 

Really, I feel the exact opposite. If I want to watch TV, I own a big screen HDTV. If I want a GPS, I like my TomTom.
If I need a camera, I have a great Nikon 8 Megapixel Camera. If I need a computer, I love my 10MB Cable Internet desktop.
and If I need to talk on the phone (which is all I use my "phone" to do) then I have my dumb cell phone,
which is incapable of any data, and I personally disabled my text messaging.
If I ever need to send texts to cell phones (rare), then I use Gmail, as it's free.
I'm more into force roaming with NAM settings on my phone.

"Don't put all of your eggs in one basket."
If you lose or break your smartphone, then you have lost a lot more than just the ability to talk.

I feel this whole thing is fair for the most part. Why should someone who uses 20 MB of data per month
suffer a slow speed, and pay the same as someone who is using 5 GB of data every month.
If heavy data is valuable to certain customers, then they should be paying more for that luxury.
The extra revenue would probably go to expanding 3G & network capacity, a win-win situation, IMO.

Though I agree, don't offer 'unlimited' if you don't have the right amount of resources (capacity) for all of your users.

 

AT&T is Cingular. Cingular's parent company bought AT&T, and renamed the company to use the more recognizable name. It's the same company with the Cingular guys in charge.

 

Here is an idea...that is different than limiting data usage by the bit or byte, and it's green too!!

Instead of giving us a daily or monthly limited on data megabyte usage. How about a rule is set that each mobile usage to the max of it's daily battery life - no recharging allowed. So each user can at max use 5 or 6 hours per day - and they can chose whether it is voice, data, ipod, etc.

Just an idea and of course JK..............

 

:cheers:

 

It's all about moving ahead with the times and newer technology, I personally like having a smartphone with all it can do, without having to carry around several devices.
But it comes down to what works for one, may not work for someone else. There are different data plans for different users.

 

Charge per use is simply not the way things are done for the most part. For example, my cable company may charge for extra speed, but they don't charge me for data usage. I can download music and movies for the same price as someone who just does occasional email and web browsing.

Likewise, phone service has moved to unlimited long distance vs. paying for minutes used. This is true of both landlines and mobile. In fact, the whole pricing plan scheme for mobile phones is based around you paying for minutes you don't use. How many people are paying for hundreds of minutes they never use every month because providers don't offer a middle point between plans?

 

I agree - I don't take any issue with a tiered data usage pricing scheme - it's what is fair for everyone. You could still have a high end "unlimited" plan for those who really need/want to pay for large amounts of cellular data, but make it a unified price structure with the allotments applicable to feature phones and smartphones. It would solve so many of the continuing nags (smartphone vs. feature phone, branded vs. non-branded) in at&t's data pricing model, imho.

But I still pay for my landline long distance on a pay per use basis too. lol. (It's rarely used.)

 

Here is that I think AT&T should do:

1GB: $15/mo
5GB: $30/mo
Overages billed at the rate of $1/MB

This won't raise the price for most people and might cut the price for some light users. Abusers will obviously pay more. Additionally, it might encourage some to use less data by switching to the lower plan in order to save some money.

 

I would add a 500MB for $10 and a 100MB for $5 as well — but I'm afraid that would mean a lot of lost money for AT&T since I'm sure the majority of people with feature phones and unlimited data plans clock in at under a 100MB and consequently they'll have no interest in adding those options.