Should AT&T Abandon Unlimited Data for the iPhone?
The Wall Street Journal has an article up today saying the iPhone uses more data than your average smartphone and suggesting:
In the short term, carriers should abandon unlimited data pricing plans. Both AT&T and Verizon Wireless already charge extra for heavy users with wirelessly connected laptops. They will have to contemplate similar strategies for smartphone users.
Short gloss — yes, the iPhone will strain AT&T’s network and the profit on the iPhone plan is probably a bit less on a per-user basis than it is on, say, a WinMo phone. However, ARPU is “average revenue per user”, and the iPhone makes AT&T’s ARPU look high and that’s still what people pay attention to. (And even with reduced profit, AT&T still makes WAY more ARPU and profit per-user with the iPhone than they do off a feature phone.)
As for abandoning unlimited data: like the cable companies, every provider wants to but nobody has figured out a way to do it that doesn’t make end users livid. So, we doubt that AT&T will pull that particular trigger.
Finally, network upgrades aren’t just about giving users speed and better experiences with fewer dropped calls and the like — they’re also about the network lowering their per user cost, and that’s certainly in AT&T’s best interests as well.
So you’re right, WSJ, that the iPhone cuts into some of AT&T’s profit levels, but not so much that it’s going to be a problem. There’s a reason they’re so desperate to re-up their contract with Apple.
[Via Gizmodo]
| Tweet |
|
|
Leave a Reply
Note: Comments must be civil, respectful, and on-topic. If a comment does not add to the conversation, if it contains spam advertising, or inappropriate language or content, it will be removed. Comments containing links may be held for moderation. Relax, enjoy, and share in the discussion.
People are now accustomed to unlimited data. The hostile reaction to limits will be the same as the reaction to Time-Warner’s attempt to limit cable data. The companies monitor data traffic and can identify users who exceed the average data amounts. Those users could be asked to move to something like the enterprise rate ATT has.
Seems like only Apple is making money of the iPhone. The carries loose money thanks to heavy internet use. The iPhone user loose money, because the iPhone distracts them from work. What an evil system.
If they allow tethering, there’ll need to be some limits.
I’ve always wondered as an 2G iPhone user if I even use my $20 worth of data service a month since I mostly wait until I get to a WIFI hot-spot or on my home WIFI since EDGE is so slow sometimes, but when I upgrade to a new phone this summer and to 3G, then I might actually use more data…but still wonder if I’d use the $30 rate (especially since I won’t even get my 200 texts at that price!)
http://www.freemacking.com/iphone.html For a tutorial on how you can get your free iPhone. Click Link
Uhhh. I live in a non-3g area. Many of the places I go are also non-3g. Add another layer of network upgrades to come trickling my way and I doubt I’ll be on any faster of a network in the near future.
So if they’re considering dropping unlimited data for iPhone users because of utilization, where’s my credit for being on a SLOW network and never living up to my potentially network crippling download ways?
I mean, fair is fair don’t ya think?
I would be furious if they no longer allowed unlimited data. I download a few Gigabytes monthly from 3G, I wouldn’t even be able to imagine what would happen if I had to pay per megabyte.
And what’s so bad about unlimited data plans? If provides users with an incentive to use their network more often which results in more phone usage which results in more texting/calling which results in more people paying the fees or upgrading their phone/SMS plans. I personally love at&t, because coming from T-Mobile, their plans are much simpler to understand and the network is much faster in the area that I live in.
personally I want them to KEEP the unlimited data plan. thats pretty much all i use, no minutes really, just data. If i had to pay per kb or mb i wouldnt have an iphone because thats all i use is data data data.
I definitely feel for the non 3G area people.
But with that being said, I would like to see the numbers for what the “average heavy user” is. Maybe I fall under it, maybe I do not.
I would be extremely against this idea and it would not matter if I was considered a heavy user or a light user. I thought if anything they were supposed to lower the price for unlimited to 20$ which I would like to see.
I also think that this whole bandwidth cap is a ridiculous movement. We’re so used to “free/unlimited” bandwidth as a SOCIETY that if it were to be capped in anyway, it would dramatically change our lifestyle.
Let me get this straight. The iPhone is used as a way to get people to pay a premium so that AT&T can grow and build out their 3G and soon to be 4G networks. Then someone realizes that iPhone users actually take advantage of what they pay for in their plans and now should be asked to pay more yet again. That makes sense if you work in a bureaucracy. However, a consumer is not going to be all too happy about that.
AT&T can study this all they want. The minute they go cable on us and limit use then they’re in for trouble because the closer the end of the exclusivity deal comes the more they’ll drive customers to VZ or T-Mo.
In the interest of full disclosure, I recently downloaded the AT&T app and found that I’m using the iPhone waaaaay more for data than phone minutes (thousands in Roll Over right now).
I think they make up for with higher texting rates and phone plans.
I find it amusing that they think the iPhone has really changed the unlimited dataplan game for carriers. I’ve used smartphones for a while now. I can tell you that based on my past bills, I used 4x (maybe even 5x) as much data on my old Palm Treos as I do on my iPhone 3G. Two big factors for me are that I don’t spend a lot of time streaming video on my 3G and that I leverage WiFi where I can. So some of that data usage that would be hitting the cell networks is gleefully using up some other broadband bandwidth.
I think sometimes the fears are based on too much assumption.
Let’s get something clear, At&t’s network is nowhere near Verizons. The inference you’re obviously making is that, if At&t does away with unlimited data, so should Verizon, due to network strain. At&t’s unlimited data rates are more than most, due to the fact At&t’s network cannot handle large data/bandwidthd use. Thus causing many iphone 3G users (and other At&t users who do not have an iphone) to lose a connection or drop a call. Verizon does not have that problem, Verizon charges high data rate because they’re greedy.
Citation Needed.
How much data are people using? I’ve never gone over 500mb, usually under 300mb per month.
@travist120 u use gigabytes on ur iPhone 3G no wifi gigabytes on ATT network? goodness wha u b doin to do gigabytes of data on ur iPhone? u can’t download nuthin to the phone from safari u use YouTube that much?
@Frog:
I’ve been plotting that for my own interest. 4 lines of service and we still only draw 400mb to 650mb.
Who are these people that draw 5 gig a month (onto a 16gig device)!!! I mean, how much porn can one guy watch? (Don’t answer that).
One line of service, between 200MB-600MB a month. (Google Reader addict, as well as heavy OTA podcast downloader and pandora user — the range is wide depending how often I am able to use wifi.)
Well.. I just checked and my plans resets in about 7 days. I’ve used 1.3 gigs of data on my iphone. That’s because I listen to Pandora about 3 to 4 hours during the day. (Can’t do that on my work machine so I use my cell).
Could I be one of those awful users then? :gasp:
Just what is everyone doing that you use “GBs” of data? I use my iPhone a lot while out and even more so now that 3G is pretty much everywhere I go. The most I used in one month was just over 500MB. I might not mind a cheaper per use plan or one with a 1-2GB cap really. It’s probably the same thing as Comcast’s data cap of 50GB per month. About 1% of users ruin it for everyone else by constantly using bandwidth.
So what is it? Streaming videos? Internet radio? You can only download 10MB files over 3G. Do people know that they are also carrying an iPod that doesn’t kill the battery and strain the network?
Data is a great way for carriers to keep churn to as low as possible. If ATT implements something like that, it will definetly disenfrachise alot of moderate to heavy users who are ATT’s bread and butter. A very dumb move if it were to be done
It WILL happen… Watch!
JUST CHECKED MY LAST BILL AND I USED (1186205 KB) DON’T KNOW IF THATS ALOT. CAUSE ON MY VERIZON WIRLESS USB CARD I ONLY GET 5GB CAP.
Uhhhh hello….. Bandwidth is free when you own the pipes. It doesnt cost AT&T anything.
I use less than 500 megs a month, a 1 gig or less plan would be nice for ten bucks
Data use is WHY I got an iPhone! I would consider abondoning if I had to pay per whatever. I hate having to worry about costly overages, esp since we have all these wonderful features and apps
This month I’m averaging 100megabytes per day. I usually use
On Rogers in Canada I pay $30 a month for 6GB which is actually a better value than your “unlimited” 5GB of data with AT&T, and I never run out of signal, never have network problems… AT&T is pretty evil and pathetic huh?..
In order for ATT to successfully limit data usage all of the other carriers must agree to this rediculous business strategy and be like the OPEC conglomerates that control oil production. I might be wrong but I think that violates US Antitrust laws.
Even if all of the carriers agree that this is a good idea. They all have to prove that their networks are strained by unlimited data usage. Justifying this to the government will be very difficult if not impossible since the whole reason for coverting all TV signals over to digital was to free up frequencies for higher wireless data bandwith.
For years S. Korea and Japan have provided far superior bandwith and coverage that make this conversation comical. They’ve had live TV streaming to there phones for years and I’m here logging onto TiPB every morning to see if apple’s approve SlingMedia’s app.
This is just another case of companies trying to create revenue for doing nothing. This is quite evident with do-nothing CEOs and the US’s current economic state.
Don’t get me wrong. I’m an iPhone 3G addict. But like others that have chimed in on this topic, to me the iPhone is a computer that fits in your pocket, and from time to time make/receive phone calls.
I haven’t checked to see if I’m a bandwith hog, but if ATT’s plan to cap data usage comes to fruition, and it puts a strain on my finances, I’ll be forced to switch to a true unlimited data plan carrier and sadley turn in my iPhone for something lesser.
Getting down from my soapbox now.
*all statements made are from my general understanding of the universe, I claim no expertise in areas of law or economics.
I’m in an area without 3G but I’m one of the very few who use EDGE. It’s pretty fast for me and I definitely get my $30 a month usage. Getting to use 3G is just a treat for me.
I think it’s funny how people say 1% of users ruin it for everyone or how can you use 5 GB of data on a 16 GB device. First of all unlimited means unlimited, no apologies. Second I was using my comcast the other night and monitored my usage. I used 50 MB of data on a very light night of use. You would be suprised how much “crap” is being downloaded in the background while your simply reading foxnews!! Also just because your using 5GB of data in no means implies your downloading it to your phone.
Also one more thing on ATT not making much on the iphone is complete garbage. All other phones ATT has includes text messages with their unlimited plan. No such luck with the iphone, so the $15 a pop of every customer for texting more than makes up for the money their losing, some other words not mine, on the data plan. Which I think it would take the accountant from Enron to say they’re losing money on the data plan. lol
Personaly I am beta testing an online multiplayer iPhone game, since I started beta testing my data rate soared. Perhaps AT&T should have roll over data as well as roll over minutes.
AT&T just restricted my data use. They claim I’m usind to much and go off net work to much, but they can’t or won’t tell me where or when. I have 5 cell phones my cable tv my home phone with them . I have over 8000 roll over minutes. My only data package is with the iPhone. The unlimited one with limitations. Sound like deseptive bissness practices to me. They gave my the option to cancelled all my phones , which are all AT&T phones and all my othe services with no cancelations peneties. Which means all my phones are wortless. This is all because they say I’m costing them money for the past 2 months . I was traveling, I pay 400 a month to them arch month and for the last 6 years they have made money for services that I don’t use. Herat job AT&T don’t worry I will find a company that want my money. And Apple good luck selling iPhones once everyone knows what there doing nobody will buy your iPhone . Your both jerks!!!!’
Thanx for this interesting article. But I had difficult time navigating through your web site because I kept getting 502 bad gateway error. Just thought to let you know.
,[...] http://www.theiphoneblog.com is one another must read source of information on this subject,[...]