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AT&T Hints At New Wireless Pricing For Thousandth Time
Clearly still analyzing how much consumers are willing to pay...
by Karl Bode Thursday 22-Apr-2010 tags: prices · business · bandwidth · Op/Ed · consumers · wireless
It seems like roughly once a week now that AT&T executives inform everyone that there needs to be a change in wireless broadband pricing -- and by change they really mean you'll soon be paying more money for wireless data. Carrier executives and investors want all users paying more for data as smartphones and open networks erode VoIP and voice minute revenues, though the carrier likes to pretend the changes are necessary because current (very profitable) pricing isn't sustainable. Speaking on the company's earnings conference call yesterday, CFO Richard Lidner again hinted at the looming change:

...you’re dealing with a situation where when you look at your customer base, even customers that are using similar devices, there’s huge disparity in the amount of data that they use and the amount of capacity they consume. And so when you look at all of those things as an industry I think it will influence how in the future the pricing models develop.

And as an industry what the industry has to do is develop models that are understandable by customers, that customers you know can understand and live with, and at the same time is fair to customers in terms of the amount of a somewhat limited resource that they’re consuming. And so that’s kind of the whole thing on data pricing and it will I suspect evolve as we go forward in the industry and it’ll evolve as applications and devices continue to evolve and data traffic continues to grow.

Again, while AT&T continues to hint at the fact they'd like some kind of pure per-byte billing model (which many people would be fine with), what carriers actually wind up implementing are pricing models where all users are funneled toward higher prices. If AT&T introduced pricing that really was based on usage -- the vast majority of their subscribers would wind up with lower bills, which of course they don't want. At this point we wish AT&T would stop talking about it and introduce their dream pricing model so we can see exactly what the hell they keep hinting at (and prepare to take out that second mortgage if necessary).

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Quaoar

join:2004-08-11
Fort Collins, CO
Reviews:
·Comcast

Internet Pricing Model

The cell phone market for internet access provides a clue to what kind of pricing strategy will come into play for cable internet.

Cell phone companies usually have some kind of minimal level of access, a somewhat expanded minimal level, and the an all-you-can-eat level at many times the price of the second tier. The penalties for overages on the first two tiers are per-byte very expensive. User's fears of the penalties drive the market to the highest, most expensive, tier where, as you wrote, no one is going to approach even minimal saturation of the service individually.

Like auto and home financing, we're not buying a product, we're buying a perceived level of "comfortable" individual indebtedness for access.

Romney2012
Defeat Obama 2012-Chg we can believe in
Premium
join:2002-03-03
USA
kudos:4

Re: Internet Pricing Model

said by Quaoar:

Like auto and home financing, we're not buying a product, we're buying a perceived level of "comfortable" individual indebtedness for access.
Just giving MOST buyers what they want - comfort and happiness with their purchase. Most buyers aren't looking for the cheapest deal. They are looking for the least bothersome deal that ALSO isn't too expensive. Can't blame a company for giving the buyer what they want and make a nice profit as well.
--
Are you happy with your rep in Washington, DC?

burgerwars

join:2004-09-11
Northridge, CA

I give up.

It isn't just AT&T. All the carriers are trying to nickel and dime you to death.

I'm thinking of putting my SIM into a prepaid phone and asking for the cheapest plan they have without data. I have enough ways to get to the internet, and I think I can survive without it on my cellphone. Feature phones and smart phones are just a way to bill customers broke.

dvd536
as Mr. Pink as they come
Premium
join:2001-04-27
Phoenix, AZ
kudos:4

Re: I give up.

said by burgerwars:

It isn't just AT&T. All the carriers are trying to nickel and dime you to death.
Looked at your bill lately? they aren't TRYING, they ARE!
--
The shortest distance between 2 points adds 1.5 stars to T. want $50? solve »coord.info/GC20A37 for me

FBGuy
yippee ki yay
Premium
join:2005-03-19
my t-mobile bill isn't doing this.
jimhsu

join:2001-06-26
Sugar Land, TX
Reviews:
·Comcast

1 edit

Regulation

Can't this be solved with regulation? "Punitive" fees for usage are an obsolete concept especially with unlimited higher tier plans available. If a user happens to use more than his current plan, and his "overage" charge exceeds the cost of the next tier minus the cost of his current tier, then the company should charge him ... the cost of the next tier on his bill. Is that really so hard to get into law?

Romney2012
Defeat Obama 2012-Chg we can believe in
Premium
join:2002-03-03
USA
kudos:4

2 edits

Re: Regulation

said by jimhsu:

If a user happens to use more than his current plan, and his "overage" charge exceeds the cost of the next tier minus the cost of his current tier, then the company should charge him ... the cost of the next tier on his bill. Is that really so hard to get into law?
It doesn't need to be put into law. Most providers do just what you are suggesting. When my mother was in the hospital before passing away, my sister blew past her monthly minutes allowed on her cellphone. 1 phone call and Verizon just bumped her to the unlimited tier for that 1 month. She went back to her regular tier and they wiped out all the overage charges.

I am aware of many instances where the providers did something similar for friends of mine. You just can't keep going to the well too often or they will see you are abusing the system.

We don't need regulators(gov't) to get involved in every single aspect of a persons life and protect them from every problem.
--
Are you happy with your rep in Washington, DC?
jimhsu

join:2001-06-26
Sugar Land, TX

Re: Regulation

If the $7000 charge for data a few posts down is any indication, providers have no interest in doing the same (charging a fair price? what a concept) with data as they do with voice. There shouldn't be a difference.
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·Optimum Online
·Verizon FiOS
said by jimhsu:

Can't this be solved with regulation? "Punitive" fees for usage are an obsolete concept especially with unlimited higher tier plans available. If a user happens to use more than his current plan, and his "overage" charge exceeds the cost of the next tier minus the cost of his current tier, then the company should charge him ... the cost of the next tier on his bill. Is that really so hard to get into law?
Consumers aren't stupid.. try to charge more than what broaband on a wired connection goes for and you will see a drop-off of interest no matter how sexy the handsets become. Those 2-year contracts are getting on consumer's nerves as well so expect alot more of the market shifting to prepaid access... and the big cellco carriers will have to figure out how to convert those customers to paying for data... at prices they want to pay.
megarock

join:2001-06-28
Catawissa, MO
Reviews:
·Charter
·Brown Dog Networks
·Access US
·Google Voice

Simply put...

I'm glad I quit doing business with AT & T several years ago.

This article is spot on with the way AT & T does business. Sink only enough money into infrastructure as to keep things barely running and find every way possible to overcharge for every service offered unless a competitor comes along then you MIGHT have to reach their pricing model.

As it stands for normal cellular service AT & T is the highest. For internet (when compared to speed/price) AT & T is again the highest. Even when it comes to prepaid cellular they are still the highest.

But their internet is way slower than cable and only on par with muni WiFi, their supposed nationwide 3G coverage isn't even close in comparison to other companies ... and there are examples over and over again of how their network falters at the least bit of usage.

If you do business with AT & T you deserve every penny they squeeze out of you.
alfnoid
Premium,MVM
join:2002-02-18

I'll be leaving soon

You can get the same thing no contract (except for rollover mins which I never use anyway, but you could buy a lot more mins for less than the $50 diff) from Tmo for 110 as you can get from the deathstar for 160 (2 year) all before taxes and fees...I'll be gone the day my contract is up.
So coverage issues aside...I don't have a reason to stay with them. Pure bottom line. And they want to charge more? HA!
jfd15

join:2008-01-07
West Sacramento, CA

4 edits

mindset

is it just me or the cell phone companies seem to have an attitude of trying to improve things as little as they can get away with and screw the customer for as much as they can get, while say the computer industry is generally making better, faster and cheaper products all the time(ACTUALLY SERVE THE CUSTOMER!!)...seems like a mindset...one always amazes me with what they have accomplished and the other generally disappoints...

and i cant believe all those people that allowed phone co's to foist the 2-year contracts on them and the idiotic minute counting..."anytime", "weekend", blah, blah, blah....made me want to vomit...and charging what 10-15 cents per text, lol....bunch of crooks...
jjeffeory

join:2002-12-04
USA

Re: mindset

You're speaking to the choir. Apparently it is just good business as usual.

michaelp95
Premium
join:2001-08-23
Tucson, AZ
said by jfd15:

is it just me or the cell phone companies seem to have an attitude of trying to improve things as little as they can get away with and screw the customer for as much as they can get,
This is all businessses today...not just cell phone companies.

MattATTWolfP

@charter.com

Matt from AT&T Wolf Pack.net

Actually, this is old news.. And the "Hints" do not mean there WILL be a price change.. it was simply brought up..

jchambers28

join:2007-05-12
Alma, AR

I quit going to major cell companies

I have quit using the major cellphone phone companies I am sticking with prepaid services I have straight talk for 45 a month my bill will never change. If it does I will use cricket.
ebubman

join:2002-01-17
Mechanicsburg, PA
Reviews:
·Verizon FiOS
·Comcast

1 edit

with my luck

planning to finally get an iphone when att deems i'm eligibile. (currently have a pos shine). that said, i'd guess the very day i get the iphone the data rates will go up. believe murphy had this stuff covered. hence, will prepare to grab my ankles.

TMMerlin
The Devil made me do it

join:2003-06-19
Oxford, MI
Reviews:
·EarthLink
·AT&T U-Verse

2 edits

Laughing My Ass Off [ LMAO]

Dump your Frack'in Smartphone and the high wireless data rates !!

Did you know a Moto V3M Razor and $29/mo will get you 200 mins durring the day/mo and unlimited mins the rest of the time ? Of course this would require that you actually "work all day" or "go to school" and not be on the phone all day long .. LMAO

All you have to do is use your cellphone as a telephone !

LMAO LMAO
--
Some people hear their own inner voices with great clearness and they live by what they hear. Such people become crazy but they become legend.

gigahurtz
Premium
join:2001-10-20
Palm Coast, FL

Re: Laughing My Ass Off [ LMAO]

said by TMMerlin:

Dump your Frack'in Smartphone and the high wireless data rates !!

Did you know a Moto V3M Razor and $29/mo will get you 200 mins durring the day/mo and unlimited mins the rest of the time ? Of course this would require that you actually "work all day" or "go to school" and not be on the phone all day long .. LMAO

All you have to do is use your cellphone as a telephone !

LMAO LMAO
I don't think a smartphone is necessary for everyone, but in my case, I use it heavily for business. My calendar and e-mail is synced and I'm constantly using it for directions to my next appointment, checking calendar, checking e-mails, etc.

It allows me to stay connected all the time, which is crucial in my line of work. I don't use much data because I'm usually in a wifi area, but I do require it.
jimhsu

join:2001-06-26
Sugar Land, TX
Reviews:
·Comcast

1 edit

Re: Laughing My Ass Off [ LMAO]

Data plans are slowly becoming like electricity -- the need is transparent (and frankly least expected when you need it the most). Lost in the middle of downtown SF and need times for the next BART? GPS+map+BART planner. You could ask somewhat that is halfway decent on the street, but they would have no idea if that is the last BART line to Fremont for that day. Meeting change? You could call 20 people (almost no business uses text, IME) or send out one email (with businesses these days, the email will probably get there faster, while the phone line will be busy or whatnot). Friend calls you a (insert witty Latin phrase)? Deliver a witty retort with Google, or stare at him blank-faced.
Delco24

join:2004-02-15
said by TMMerlin:

Dump your Frack'in Smartphone and the high wireless data rates !!

Did you know a Moto V3M Razor and $29/mo will get you 200 mins durring the day/mo and unlimited mins the rest of the time ? Of course this would require that you actually "work all day" or "go to school" and not be on the phone all day long .. LMAO

All you have to do is use your cellphone as a telephone !

LMAO LMAO
Too bad Verizon forces you to get a data plan on almost every phone now. When is this crap going to end?
Yilancio

join:2006-02-07
Claymont, DE

Re: Laughing My Ass Off [ LMAO]

You better check your facts. ONLY on Blackberry/smartphones do they force you to get a data plan. Let me guess...you want a Blackberry, but don't want to use it for any data? LOL! If that's the case, we call ppl like that 'posers'.
Delco24

join:2004-02-15

Re: Laughing My Ass Off [ LMAO]

said by Yilancio:

You better check your facts. ONLY on Blackberry/smartphones do they force you to get a data plan. Let me guess...you want a Blackberry, but don't want to use it for any data? LOL! If that's the case, we call ppl like that 'posers'.
Actually, you better check YOUR facts. Starting a few months ago, Verizon requires a minimum $10/mo data plan on all 3G phones, with the more expensive $30/mo data plan on their smartphones. Furthermore, I use my smartphone data plan extensively for work. But, people like my fiancee and my mom do not use data on their phones at all, yet would be required to get a data plan they would never use, or else get a crap phone that doesn't do 3G.

Source: »www.verizonwireless.com/b2c/spla···dividual
Specifically, the fine print of
quote:
Data package of $9.99 or higher required for 3G Multimedia Phones.
Data package of $29.99 or higher required for 3G Smartphones.

MovieLover76

join:2009-09-11
kudos:1
Reviews:
·Verizon FiOS
·DIRECTV
·Optimum Online
·Cablevision

Frankly I don't know what they expect, a kidney!

I am a moderate iPhone user, I pay $100 a month for cell service
I use maybe 300 mins a month
500 - 700 txts a month
150 - 300Mb of data a month as i'm usually on Wifi
Now if they wanted to give me fair options, maybe open up the $15/ 250MB plan they opened up for the Ipad I'd be fine with it and I would restrict my usage slightly to stay within that limit
I'm sure a lot of people on mandatory data plans would

But no, they want to devise a way to get me to pay more than $30 a month for data, I can respect a cap of 5GB on wireless data

But no they are probably just going to put a very low cap on a $20 and $30 plan and force the majority of users onto a higher rate data plan for what is actually very moderate usage.

Most people simply can't afford > $100 cell phone bills
A lot can't afford what they charge now.
They need to understand that

Unless that's what they want price most of their users out of using data and then they can sit on their ass and not upgrade their network, which would kind of kill where their business is supposedly going wouldn't it?

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