AT&T: iPhone Data Pricing Comments 'Taken Out Of Context' > Usage billing NOT just because of more revenue

reply to karlmarx

Re: Usage billing NOT just because of more revenue

reply to Linklist
NO, repeat after ME. Apart from electricity and support, the ONLY cost is CAPITAL. HOW do I know this? Let's see, I BUILD NETWORKS. Once we pay for the switches and routers, the only cost we have is electricity. PERIOD. Yes, maintenance contracts, but again, those are CAPITAL costs. It cost me EXACTLY the same to move 100TB of data as it does to move 1GB of data. The DIFFERENCE, is that I had to use CAPITAL to build a network that could move 100TB of data. If I built a network to move 1GB of data, my CAPITAL cost would be a lot less, but my operational cost would be EXACTLY THE SAME. THUS, there is no COST to move data, only the capital outlay. AT&T does not want to spend the CAPITAL to provide the ability to move 100TB of data, so they try and place the blame on the cost of moving data, but they are LYING.
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Remember 1 in 4 people are retarded. 25% of Americans are Republican. Coincidence? I don't think so.

reply to Linklist
The sad part, is that until there is a 'lower tier', there is no incentive to have users consume less.

I'd take a 500MB or 1GB or even PPU plan on an iPhone, however, AT&T offers only buffet style all you can eat, and forces a 2 year commitment on it.

I would be happy if they offered:
1. PPU or WiFi only (free?)
2. 500MB for $15/month
3. 5GB for $25/month
4. 10GB for $35/month
5. 50GB for $50/month

While I do expect at some point a consumption based billing, until they make the base amount less than the current (they WILL be offering less, after all), there's little incentive from a customer base.
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Canada = Hollywood North

reply to karlmarx

reply to en102

reply to Linklist
Hmm. I have a degree in Accounting from Syracuse. A 5 year maintenance contract purchased the same time as the equipment is amortized over 5 years. In fact, in our ASSETS, we list the value remaining on the maintenance contracts. The capital is consumed over the course of the year. They are an EXPENSE when the year is up, but they are NOT an operating cost. Operating costs are the cost to maintain the network, not replacement of capital equipment.
Please reply once you get a degree in accounting.
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Remember 1 in 4 people are retarded. 25% of Americans are Republican. Coincidence? I don't think so.

reply to Linklist

reply to Linklist
Well, in theory, it should. I'd suspect, like many things the bottom line won't be any less.. they'll just throw in a few items to appease us.
I.e. the $30 will still be the cheapest data available, however, with 5GB cap, but we'll toss in 200 free txt messages/month.
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Canada = Hollywood North

reply to Karl Bode
LOL - its a general rule of business.
I think its more of 'you pay less/item if you consume less'. Your total bottom line will not be lowered.

If this was the case, I'd have an iPhone on pay per use billing running WiFi 99% of the time, saving +$300/year.
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Canada = Hollywood North

reply to karlmarx

reply to Linklist

reply to Linklist
One can tell when somebody has lost an argument when he/she resorts to personal attacks.

Since you decided to go this route, what's your education? Mind to tell us why you state OPINION as FACT?
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Do or do not, there is no try! - Yoda

reply to karlmarx
I see both sides of this. I agree that once the network is built, it doesn't make any difference how much data you move. In fact, a network that is underutilized is worse than a network that is near capacity -- assuming greater utilization is because of an ever increasing number of customers willing to pay for network access. That said, from a customer experience perspective, it's important to manage the network properly to ensure that expectations are met. If someone tries to stream audio or video on their iPhone and it's always choppy, there will be the impression that the network stinks.

If the network is overburdened, you can only do two things: increase capacity and/or lower utilization. The customer education AT&T seems to be wanting is to lower utilization by having customers use less because to use more will cost them dearly.

Depending on how they do this, perhaps this isn't so bad. I typically use just shy of 1GB/month on my iPhone (at least according to AT&T's usage tracking). If they charge, say, $10/GB/month for that data, my bill will go down. Of course they won't do that. The current $30/month I pay will become a "network access fee" and then they'll add $10/GB/month. This effectively increases my bill by 33% and will probably cause me to be careful how much Internet access I use without a WiFi connection.

I must say that this thought process is consistent in every corner of corporate America. Today my company's CEO gave a nice speech at our Christmas Party. While he spent a little time discussing increasing sales by opening more stores, he spent the bulk of his time discussing how in these trying economic times we have to cut, cut, cut operating costs. He said we need to cut costs everywhere -- even if it means looking at the HQ coffee and janitorial expenses. Of course at the end of all this cost cutting talk, he mentioned that our company is healthy and is making strong profits. This is the same CEO who several years ago claimed that we will never SAVE our way to success. We must SELL our way to success.

I'm left with the thought that executives and investors need to be educated about how honest money is made. It isn't buy for a $1 today and sell for $5 tomorrow. Perhaps a 5% or 10% investment return should be considered acceptable rather than always expecting 25, 30 or even 50%. What's really funny is these same folks whine about how the government is a massive wealth redistribution scheme. Well, based on my personal experience with 401K plans over the past 15 years, whoever created these laws has enabled Wall Street to move massive quantities of wealth from the average corporate employee into their pockets the likes of which can only be compared to Usul's worm sign on Arrakis.

reply to ptrowski

reply to The Limit

reply to Linklist
Wow. You posted the EXACT ANSWER IN your first line, yet you still don't GET IT.

So, our maintenance contract which COSTS $30,000.00, and is good for 5 years, has a VALUE of more than $5,000.00. That means it's $6,000.00 per year.

Now, year 1, you have a CREDIT of $30,000.00 to your bank account, so obviously you need to have a $30,000.00 DEBIT somewhere. Lets see, where can we DEBIT $30,000.00? Can we EXPENSE the $30,000.00. Sure, we could. But.. But... the contract, after year 1, is still good for 4 more years! Oh, wait, that's $24,000.00 of VALUE. So, we still have $24,000.00 of VALUE left after the first year. Hmm...

I know, what we CAN do, is we can EXPENSE the $6000.00 of VALUE that we lost in year 1, but we still have somthing worth $24,000.00 left, that we need to DEBIT somewhere. Let's see. Hmmm.

So, what DO we do? I know! We create a CAPITAL ACCOUNT to put the remaining $24,000.00 in! That way, as ALL ACCOUNTING MUST DO, we keep the numbers in BALANCE. The $24,000.00 IS A CAPITAL ACCOUNT. And each year, we can EXPENSE $6000.00, and offset the CAPITAL ACCOUNT.

What you posted is for ITEMS with a value of LESS than $5000.00. I never SAID it was CAPITAL EQUIPMENT, I said it was CAPITAL. Which it IS. You CAN CAPITALIZE maintenance contracts, it's done ALL THE TIME for multi-year contracts. IF IT WAS a 1 year maintenance contract, then YES, it would be considered an expense. But high end equipment is almost NEVER sold with just 1 year contracts.
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Remember 1 in 4 people are retarded. 25% of Americans are Republican. Coincidence? I don't think so.

reply to k1ll3rdr4g0n

reply to karlmarx

Re: Usage billing NOT just because of more revenue