AT&T says Metered Cell Phone Data Plans are Inevitable

[dguy6789]

http://www.dailytech.com/Update+ATT...ne+Data+Plans+Are+Inevitable/article17814.htm

AT&T really surprises me. If I ran a company and customers were fully maxing out all of the services I provide, I would work on increasing my ability to provide service to get more customers, rather than trying to tell the customers to use less of it and pay more for it. That's how most companies work, but not AT&T?

An example of a fair data plan in AT&T's mind is 250MB per month for $15 per month. That's one they will be(or maybe already are) offering.

 

[zerogear]

The day they do that is the day I jump ship.

 

[Deeko]

I mean, they do have a point. Most smartphone users do the typical emailing and web browsing and don't use a ton of data...but then you've got the crowd that does a ton of Pandora'ing and Youtube'ing that use 10x or more data. I don't think the former crowd should have to pay as much as the latter.

 

[dguy6789]

AT&T is just about the only cell phone company complaining about data usage. I bet there's very few people that use anywhere near $30 a month of network use when it comes to what they cost AT&T to provide for them.

Right now they have a terrible public image as a company. The Iphone is their one trump card. They don't have better prices on plans, they don't have better coverage, they don't have better customer service. What do they offer consumers? And here they are now getting ready to charge people more for something they have been used to paying a flat fee for for a long time.

 

[Deeko]

Well, they are also the only carrier with the iPhone - which I'm sure provides a far greater number of bandwidth hogs.

Your usage shouldn't ever be equal to what you're paying. Frankly, companies exist to make a profit, not to do you a service. Also, there is a lot of capital investment in a cell phone network too - rolling out new towers to new areas, upgrading to faster versions of HSPA, converting to LTE, etc. If the cost of maintaining you as a data customer is actually $30, then you aren't really a customer they want to have.

 

[AstroManLuca]

Cell phone data plans are already all semi-officially capped at 5 GB, which seems fair. Similarly, home internet service seems to be semi-officially capped at 250 GB by most ISPs, which is also a reasonable amount. Of course, some companies want to LOWER their caps, which just doesn't make sense when data storage technology is constantly improving and software and media is constantly getting bigger.

I'm not opposed to caps, nor am I opposed to a tiered system, but of course the companies will want to turn things around and charge more for less. It would make sense to have $15/mo for 250 MB and keep the current plan of $30/mo for 5 GB, but I doubt any carrier would drop the minimum price on smartphone data plans. And of course they keep whining and complaining about iPhone users stressing their network. They don't seem to appreciate the fact that Apple basically handed them millions upon millions of new customers by giving them exclusivity.

Man, ISPs piss me off.

 

[Brian Stirling]

I've had my 16GB 3G for coming up on two years and was looking at upgrading to a 64GB 3GS+/4G iPhone, but if they raise my rates I will dump the iPhone and go Nexus One! Do you hear that Apple! D: D: D: D: D:

I should mention that I do very little data on the iPhone and for the last year very little web surfing so my use would likely be at the low end of subscribers.

I fucking HATE ATT :thumbsdown: :thumbsdown: :thumbsdown: :thumbsdown: :thumbsdown:



Brian

 

[pm]

I personally think they have a bit of a point. Bandwidth is a fixed resource. There is only so much of it allocated for data. They can add more cell points but that always seems to be a bit of "not in my backyard" for a lot of people - plus they are a bit an eyesore.

I lived in Europe last year and I particularly liked paying for data. In my case, it was a lot cheaper than what I pay for data in the US. Over a 6 month period, I was paying $8 for 65MB... and for me I was going through about 130MB per month. So $16/month - beats the $30/month that I am paying for "unlimited" now. It seemed fair enough for me... and if I wanted to pay less, I could have dropped from 3G to EDGE and cut my prices in half (and bandwidth by 2/3's).

About the only thing that I wish is that we had enough competition in the US cell market that at least one carrier would offer a pay-as-you-use data plan. Not tiered with caps but just pay for what you use.

 

[AstroManLuca]

I personally think they have a bit of a point. Bandwidth is a fixed resource. There is only so much of it allocated for data. They can add more cell points but that always seems to be a bit of "not in my backyard" for a lot of people - plus they are a bit an eyesore.

I lived in Europe last year and I particularly liked paying for data. In my case, it was a lot cheaper than what I pay for data in the US. Over a 6 month period, I was paying $8 for 65MB... and for me I was going through about 130MB per month. So $16/month - beats the $30/month that I am paying for "unlimited" now. It seemed fair enough for me... and if I wanted to pay less, I could have dropped from 3G to EDGE and cut my prices in half (and bandwidth by 2/3's).

About the only thing that I wish is that we had enough competition in the US cell market that at least one carrier would offer a pay-as-you-use data plan. Not tiered with caps but just pay for what you use.

It would certainly make people think twice before using mobile data off WiFi if they were charged per MB. It would have to be a reasonable rate, of course, not the $2/MB you see now. Also, you can't even choose between 3G and EDGE these days. To the big American cell phone carriers, a data plan is a data plan is a data plan. Every phone that meets a set of entirely arbitrary requirements is required to have a data plan, and those data plans are always $30/mo for 5 GB of 3G. It doesn't matter whether you use 2 kB or 2 MB or 2 GB of it, or whether your phone even has 3G capability.

It seems the US carriers have dug themselves into this hole and now they're scrambling to see how to get out. $30/mo is a big surcharge, but if you use mobile data a lot it's a great deal given that the 5 GB cap is pretty high. I guess they'll just have to figure out a way to squeeze more money out of people.

 

[dguy6789]

They have a point to an extent, but they aren't being honest with their costs. They charge people waaaay more than it costs them to provide the service, just like every single ISP in the US. Their profits are huge.

Go to Europe or Japan where ISPs actually compete with each other instead of having a regional monopoly and you'll they have superior coverage, speeds, and lower fees for service.

In short, AT&T is trying to see what they can get away with due to a lack of competition. There is no chance they are legitimately having cost issues.

 

[pm]

I'm not saying that I really emphasize with AT&T, but I do generally agree that when you have a limited resource and people are charged for "unlimited" then eventually you will run out of that thing. When I first moved to Colorado, water wasn't metered in my neighborhood. Without meters, there's really no incentive to do anything more than use as much as you want. That's fine until we had a dry year and then another one after that. They can put up signs and advertisements and ask people to conserve, but there's always a few people - or more than a few - who just ignore that. Once they put in meters and tiered pricing, you could see a noticeable change in behavior.

I'm not saying that I like paying more for something - of course, I want things as cheap as possible - but I am saying that if you want to change behavior, tiered pricing is a very effective way to do it, and if you have a fixed amount of something then "unlimited" service doesn't encourage people to use anything less than as much as they want.

I don't use WiFi with my iPhone at home - 3G is plenty fast, and I always forget to turn off WiFi when I leave home and then my battery life isn't as good when I'm out of the house. But there's absolutely no incentive for me not to use as much data as I want. When I was in Europe, I pretty much never used 3G when I was home... as soon as I walked in the door, I switched off 3G and onto WiFi.

All that said, I don't have much sympathy for AT&T. As everyone has said they are milking the iPhone for as much as they can. $30/month for a data plan for my sister and mother who both use their iPhone data to check email and maybe the weather and that's about it and who maybe use 5MB each per month total is crazy. It's like SMS messaging at $0.20/message... it's completely divorced from the reality of what it costs AT&T to provide it. AT&T makes ~$3 billion in profit per quarter (on revenue of $30 billion with about a 50/50 revenue mix between wired and wireless services). $12 billion in profit per year doesn't make me feel much empathy for their poor situation.

They want to roll out tiered service - fine... but the iPhone is at the absolute edge of what I'm willing to pay for it. If they raise prices on it at all, and I'll just jailbreak, move it to T-Mobile and will happily cut data out of my plan - WiFi at work and at home... I'm mostly set. As it is, I sometimes regret that I bought a new 3GS when I look at my cell phone bill compared to what it was pre-iPhone 3GS on T-Mobile.

And clearly I'm not the only one who feels this way - most this thread is people complaining they feel like they are barely getting adequate value for their money, and my co-workers and friends say the same thing. Having a customer base of people where a substantial portion feel that they are paying too much for something shouldn't leave AT&T in the situation where they think they can raise prices much.

 

[Suspicious-Teach8788]

AT&T is just about the only cell phone company complaining about data usage. I bet there's very few people that use anywhere near $30 a month of network use when it comes to what they cost AT&T to provide for them.

Right now they have a terrible public image as a company. The Iphone is their one trump card. They don't have better prices on plans, they don't have better coverage, they don't have better customer service. What do they offer consumers? And here they are now getting ready to charge people more for something they have been used to paying a flat fee for for a long time.

Wrong. Every carrier complains about data. In Europe, tiered data is everywhere. Verizon has PUBLICLY said that tiered data will probably come in the future.

They don't have better prices, but they don't have worse prices. Verizon and ATT match each other neck and neck. As for coverage, yeah, there are some deadspots here and there, but if you are in the middle of the population mass, usually it's fine. As for speeds, AT&T kills Verizon currently. PC World, Gizmodo and 2 other sites have confirmed this in their nationwide testing.

I guess the important thing is: WHAT is an acceptable rate?

$10 - 500mb
$20 - 2gb
$30 - 5gb
$40 - 1gb
$60 - unlimited?

The $30 plan already has a soft 5gb limit. I don't mind a hard limit.

ATT has a point. there are data guzzlers. There are iPhone users who just plug into their computer and replace their DSL connection and consume 20-30gb a month. AT&T has already shown that a small fraction of their customers use like 80-90% of the data. The same goes with Comcast. For most of you, this won't even matter.

Example: Comcast. Hulu and streaming media don't gobble bandwidth. 250gb is good for ~20 or so 1080p HD rips. You really gotta go through a lot of crap to surpass this limit. Even if you download the 1gb 720p TV show rips, you will come nowhere close. Of course people think they are entitled to leave their newsgroups on downloading all day long.

 

[dguy6789]

You could add a zero to the amount of data for each of your pricing suggestions(5GB, 20GB, 50GB, 100GB, Unlimited) and a cell company would still make a profit and have no problem providing service.

$40 a month is a reasonable price in the real world for 100mbps wired service with no data caps. That's what you pay in a country with competing ISPs. In America, $40 a month will get you 5-10mbps possibly with a data cap. Why? Because Americans are completely brainwashed into thinking the service they get is reasonable for the price they pay. ISPs don't compete with each other. They are usually the only ISP providing any service at all in their given area. So the question isn't is this a good deal or not, the question is do you want internet at all or not.

The exact same thing is occurring in the mobile service market. The mobile ISPs are not competing with each other based on price or service right now. They are competing based on who has what phone and that's it. People extremely rarely shop based on service providers today. They shop based on phones. X ISP is the only one that carries Y phone. You want Y phone, you pay what they want you to pay or you don't get Y phone. So people pay. AT&T is just trying to see how much more they can get people to pay than they already are, even though AT&T is already making insane profits.

 

[Suspicious-Teach8788]

You could add a zero to the amount of data for each of your pricing suggestions(5GB, 20GB, 50GB, 100GB, Unlimited) and a cell company would still make a profit and have no problem providing service.

$40 a month is a reasonable price in the real world for 100mbps wired service with no data caps. That's what you pay in a country with competing ISPs. In America, $40 a month will get you 5-10mbps possibly with a data cap. Why? Because Americans are completely brainwashed into thinking the service they get is reasonable for the price they pay. ISPs don't compete with each other. They are usually the only ISP providing any service at all in their given area. So the question isn't is this a good deal or not, the question is do you want internet at all or not.

The exact same thing is occurring in the mobile service market. The mobile ISPs are not competing with each other based on price or service right now. They are competing based on who has what phone and that's it. People extremely rarely shop based on service providers today. They shop based on phones. X ISP is the only one that carries Y phone. You want Y phone, you pay what they want you to pay or you don't get Y phone. So people pay. AT&T is just trying to see how much more they can get people to pay than they already are, even though AT&T is already making insane profits.

Vodafone and O2 charge about $37 or so for 5-10gb of data. The American mobile market is very different. Carriers spend a lot of money trying to get cheap phones AND to get special exclusive US phones. Also because US phones need CDMA or different GSM bands, all these manufacturers make SPECIAL US phones.

If you go overseas, the Touch Pro 2 is the same on every carrier. The only difference is the software. They get to load a few apps here or there.

Here, AT&T gets its own ugly orange box, its own stamp on a phone that's sold nowhere else in the world, etc etc etc. Yeah. Tell me that doesn't add up to a lot of money for them.

 

[dguy6789]

One more point I want to make- AT&T isn't trying to make things fair, they are just trying to make more money.

Notice how they are not all over the idea of charging someone less than their monthly data fee if they use much less than their monthly allowance. A true tiered system would do just that, assuming the real goal was to make people pay for what they use.

This obviously isn't AT&T's goal, AT&T's goal is just to make more money because of greed. It's not out of any principle of fairness or because they are losing money.

 

[bassoprofundo]

I have absolutely no problem paying tiered data rates provided that they keep cost down as it'll probably save me money. I hate what it represents in that, in line with what others have said, I feel like it's a move by the carriers to force people into the tiered mindset and then slowly raise prices. However, if they keep prices steady (i.e.- $30/5gb and less for lower data amounts), I'll generally save money in most months.

However, it's absolutely a MUST for me that they have some means in place to prevent ridculous charges for overages. In other words, if I go over my allotment for the month, then auto-up me to the next tier pricing for that period. What I DON'T want is the same, ridiculous model they use for voice overages where you pay some ridiculous per minute/meg charge for every fraction you go over your current plan. Let me pay a reasonable rate for what I use, but don't place a continual burden on me to monitor my usage down to the Nth degree to avoid getting raped on my bill.

 

[MJinZ]

Vodafone and O2 charge about $37 or so for 5-10gb of data. The American mobile market is very different. Carriers spend a lot of money trying to get cheap phones AND to get special exclusive US phones. Also because US phones need CDMA or different GSM bands, all these manufacturers make SPECIAL US phones.

If you go overseas, the Touch Pro 2 is the same on every carrier. The only difference is the software. They get to load a few apps here or there.

Here, AT&T gets its own ugly orange box, its own stamp on a phone that's sold nowhere else in the world, etc etc etc. Yeah. Tell me that doesn't add up to a lot of money for them.

AT&T is no longer orange....^_^

My parents use iPhones. I however, would not touch AT&T products with a fruit shaped stick.

 

[Bateluer]

There will be a mass exodus away from AT&T once their lose the iPhone exclusive.

 

[Suspicious-Teach8788]

AT&T is no longer orange....^_^

My parents use iPhones. I however, would not touch AT&T products with a fruit shaped stick.

Sorry, I haven't touched carrier phones for a long time.

- Sprint Samsung flip (last time I saw CDMA)
- T-Mo Moto V600 (branded only cuz the unbranded one was OOS, but they unlocked this for me)
- SE K750i
- SE K700i
- SE W810i
- Nokia N82
- iPhone 3GS (ok but there's no fat AT&T on this)
- Motorola Milestone

I like how most of my boxes (and I should have all of them) don't have a single carrier logo on it.

 

[theeedude]

I think fixed price per megabyte is the way to go. I have t-mobile prepaid where I pay per message and per minute, seems like a good model to me. Use less, pay less, use more, pay more, that's how life works.

 

[Suspicious-Teach8788]

I think fixed price per megabyte is the way to go. I have t-mobile prepaid where I pay per message and per minute, seems like a good model to me. Use less, pay less, use more, pay more, that's how life works.

yes but it's not realistic once you get to a certain point. why not have fixed price per minute like when we used to roam? or overages? isn't it like 0.35 per minute? Tiered service is fine. Why don't we time people for how long they watch cable TV?

 

[2Xtreme21]

Fuck AT&T. Do you know how much money they make from text messages alone? For sending 160byte files across an already unreliable network? All they're trying to do is pad their own damn pockets, and because of the lack of competition, the end user is royally screwed.

They can suck it. My contract is up in July and I can't wait to walk away.

 

[Bateluer]

I think fixed price per megabyte is the way to go. I have t-mobile prepaid where I pay per message and per minute, seems like a good model to me. Use less, pay less, use more, pay more, that's how life works.

Ah, a complete stall of digital distribution. Just think how much more quickly we can fill landfills with this mentality.

Ultimately, this would make the carriers less money than offering unlimited plans at a fixed rate. Why? Metered service would drastically reduce the smart phone market. When someone buys a smartphone, whether it be an iPhone, a Droid, a Blackberry, or something else, they want to use it for email, web browsing, etc. If the customer is suddenly told that their normal usage is going to earn them a 500/month bill, their usage is going to stop. If all carriers begin doing it, the user is going to go back to a simple, dumb phone that's incapable of using data. As a result, the carrier goes from making 100/month on the unlimited plan to only making 20 to 40 a month as the user restricts their usage. And if there's any carrier that is offering unlimited service at a reasonable price, that's where all the customers desiring smartphones are going to run to.

And for traditional ISPs, metered service destroys the Internet. Literally. No more music downloads, no more Youtube, no more Netflix streaming, embedded ads eating up your wallet, spam eating up your wallet.

Profits in the immediate short term are not the only factor to consider.

 

[DivideBYZero]

There is nothing wrong with tiered offerings. Both the user and the carrier wins. Low data users pay less and reduce their costs while power users get all the data they want by paying for it. I have no issue with it.

Disclosure: I haven't paid a cell phone bill since 2002, all my BlackBerry calls, texts and unlimited data, and my 3G laptop Dongle, are all paid for by my employer.

 

[yh125d]

"Hey guys, lets charge more for poorer service!"

What other industries does this happen in? :|