AT&T is once again dropping hints that the carrier wants to change (read: increase) wireless data pricing. Many investors have been pressuring the company
to ditch the unlimited $30 iPhone data plan, and instead replace it with some kind of metered billing model. That's largely because as carriers begin to open their networks to push IM clients and mobile VoIP, they'll be losing a lot of money on voice and SMS. The only way to counter those losses will be to charge more money for mobile data. Enter AT&T CEO Randall Stephenson, who this week tells Reuters
the changes will be coming soon:
Stephenson expects changes in how the wireless industry prices its mobile data services going forward, with heavy data users being charged more. Smartphone users currently pay a monthly fee of about $30 for unlimited data. "For the industry, we'll progressively move toward more of what I call variable pricing so the heavy (use) consumers will pay more than the lower consumers," Stephenson said.
What Stephenson calls "variable pricing" is confused by many to mean per-byte billing. While the idea of only paying for what you use
sounds great to those not paying attention, the plans AT&T and Verizon actually wind up implementing
are very carefully crafted to drive most user bills ever higher. Verizon for instance now offers users the option of paying either $9.95 for a phone data plan with a 25MB cap (20 cents per additional MB, 125 MB maximum), or $30 for "unlimited" (which actually means 5 GB a month) service. This is in addition to SMS, voice, and other monthly fees.
These plans really aren't about making "heavy users" pay more, they're about getting everybody
to pay more. Since most users consume much more than 25 MB per month, they'll all wind up upgrading to the more expensive plan in the belief it offers a better consumer value. But suddenly, here you are paying more than $100 a month for voice, data and SMS plan when you're really not a particularly heavy user. Most users are somewhere around 200 MB a month, though you'll note the absence of a $20, 300 MB plan.
My expectation is that there's not going to be a lot of people out there looking for another subscription
-AT&T CEO on iPad 3G
Meanwhile, you've got AT&T and Verizon also now requiring
have an SMS and data plan on their phone -- whether they actually use data or not (for AT&T, just smartphones require data plans, for Verizon, every phone now does). What's designed to look like value and choice is in most cases the exact opposite. When thinking of 3G pricing, picture a giant invisible funnel that propels users toward one inevitable outcome: paying more money.
Whatever pricing emerges, eventually users will realize they want to connect multiple devices to these 3G and 4G networks without having to pay a subscription fee for each and every device. While some people think the $15 for 250 MB a month or $30 for unlimited 3G pricing of the iPad is a "great"
deal, most people simply aren't going to want to pay yet another monthly fee just for iPad bandwidth after shelling out for both home and wireless connections. Amazingly enough AT&T agrees, Stephenson saying he sees the iPad as a largely Wi-Fi device as a result.
"My expectation is that there's not going to be a lot of people out there looking for another subscription," he said during a webcast of an investor conference, adding that the device would be a mainly "Wi-Fi driven product."
Even the company that's providing the iPad's 3G functionality doesn't think you're willing to pony up the extra cash, which is saying something. Whatever changes AT&T has in store for their bandwidth pricing, make absolutely no mistake that the end result is going to be you paying more money for mobile bandwidth, regardless of whether you use 100 MB a month, or four gigabytes a month. It's absolutely essential to carrier execs and investors eager to compensate for lost voice and SMS revenues. Anybody claiming otherwise is either selling you something or not reading the fine print.