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AT&T Hints At Usage-Based iPhone Data Pricing
To be 'determined by industry competition..'
by Karl Bode 03:22PM Wednesday Dec 09 2009
Investors like Craig Moffett have been urging AT&T to ditch the $30 unlimited pricing model and start charging customers more money for wireless data in the form of steep overages. While there's some customers who think a more usage-based approach is a good idea, they usually fail to understand that when carriers implement such models, they frequently don't offer improved value, and users wind up paying higher prices. If you're one of the many iPhone users who like the $30 unlimited data model just as it is, things may be changing soon according to AT&T's wireless division boss:
With about 3% of smart-phone customers driving 40% of data traffic, AT&T is considering incentives to keep those subscribers from hampering the experience for everyone else, he said. . .Many customers don’t know how much bandwidth they’re consuming, Mr. de la Vega added. When AT&T conducted a broadband test, customers often reduced their data use. Longer-term, he said, a pricing scheme based on usage is likely, though it will be determined by industry competition and regulatory guidelines.
Of course for every user who's gobbling up a lot of data, there's dozens more paying $30 a month simply to access their e-mail occasionally. In the end, AT&T's consistently made more than enough money to keep pace with user demand without changing iPhone data pricing models -- they just failed to meet capacity demand. The result has been a very bad public relations year for AT&T, as consumers reacted to an AT&T wireless network that wasn't ready for the iPhone. That's AT&T's fault -- not the fault of flat-rate $30 pricing, or the fault of customers who simply want access to what was advertised.

While AT&T (and every other carrier) likes to pretend that the shift to the overage model is driven by things like "fairness" or necessity, the reality is the push is driven by investors for one reason: it winds up with you paying AT&T more money for the same (or less) service.

88 comments .. click to read

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Chicago, IL

2 recommendations

So, lets be FAIR

Ok, so they charge $30.00 for 5GB of data. Let's be fair, they charge $6.00 per GB. Let them DO a usage based fee then. If you only USE 1GB, then you data bill is $6.00. Oh, WAIT, that's NOT what they are talking about. They are taking about a BASE $30.00 charge for the 1st byte, and $6.00 for every GB above that. I fail to see how the latter pricing plan is an INCENTIVE for users, that's a DISINCENTIVE.
Remember 1 in 4 people are retarded. 25% of Americans are Republican. Coincidence? I don't think so.


Tuscaloosa, AL

2 recommendations

reply to Kearnstd

Re: Wouldn't switch

It's not even an issue of being on the cutting edge; it's an issue of investing in needed infrastructure. You can't just buy a vacant lot and magically produce a product without building a factory. Building that factory takes time and money, but it pays off in the long run. However, investors want profits NOW because they're usually not holding a stock long enough to realize any long-term gains, so they'd rather buy the land, then try to resell it for a quick buck. The short-term profit will be greater, but the long-term profit will be nil.

I firmly believe that, had this mentality been at work years ago, many of the major companies we have today wouldn't exist. Investors would have demanded such high immediate profits that the companies couldn't have invested anything to build infrastructure.

Not to start a political firefight, but, IMHO, this is an issue that plagues us as a country. In many areas, our infrastructure is either crumbling or simply hasn't been built properly. Everyone wants the lowest possible taxes, then they complain that roads and bridges are falling apart or the school systems are on financial life support. I'm no fan of taxes that are higher than they should be or excessive government waste, but if you want infrastructure for the future, someone is going to have to pay now. You can replace that aging bridge now on a reasonable schedule, or you can not spend the money and wait for it to be on the point of collapse, but then you have to build the new one in a hurry, which will likely cost more, plus you may have to reroute traffic if the old one has become unsafe, which causes headaches and congestion.

People have become so accustomed to immediate gratification that no one wants to spend money now for a return down the road. It's a philosophy of, "I want my money now. Let someone else worry about the future."