Can AT&T tame Apple iPhone data hogs with tiered-pricing?

Apple Online Store“Pity poor AT&T. The wireless operator with exclusive rights to sell the iPhone in the U.S. is bashed incessantly for service that rarely lives up to the elegant promise of Apple’s sleek device. Now, when many consumers feel they should be receiving rebates, the company is getting lambasted for hinting it might take measures to rein in the heaviest iPhone users. Some customers even planned to crash the company’s wireless network on Dec. 18 in protest,” Peter Burrows and Olga Kharif report for BusinessWeek.

“Yet Ma Bell, for all her shortcomings, has a point. With the smartphone fast replacing the PC as the center of many consumers’ digital lives, changes in the way people use mobile computing are inevitable,” Burrows and Kharif report. “Analysts and other experts say wireless operators need to train American consumers that bandwidth isn’t unlimited. That won’t just be good for phone companies; it’ll be good for virtually all mobile phone users. Today, AT&T says 3% of iPhone users account for 40% of the traffic on its data network. The other 97% may get better, cheaper service if YouTube video and online radio addicts paid more for the network upgrades required to support their habits. ‘It’s not a question of if this changes, it’s a question of when,’ says analyst Charles S. Golvin of Forrester Research.”

Burrows and Kharif report, “In the three years since the iPhone’s debut, data traffic on AT&T’s network has soared 5,000%. De la Vega is certain it’s just the beginning. Tens of thousands of software developers are dreaming up applications to run on the iPhone and devices from Research In Motion, Motorola, and Nokia. Several apps already use unprecedented amounts of bandwidth: Ustream allows people (like actor Ashton Kutcher) to broadcast live video to millions of fans over the iPhone. ‘Other carriers are just getting a glimpse of what’s coming,’ says de la Vega.”

“AT&T, meanwhile, is racing to improve,” Burrows and Kharif report. “It’s upgrading software that should double the speed at which bits move from a phone to the nearest cell tower and digging trenches to add 100,000 fiber-optic lines to connect cell towers back to the Internet. Overall, the company is expected to invest $7.5 billion in its wireless network this year, says market research firm Ovum, slightly more than Verizon.”

Full article here.

[Thanks to MacDailyNews Reader “James W.” for the heads up.]

36 Comments

  1. The US cell carriers are doing fine overall. If you think that Obama/feds would do a better job, just look into how difficult it is to find a doctor that takes Medicaid or, increasingly, Medicare. Government underinvests and creates scarcity. Stop whining and demanding a free lunch. There is no “unlimited” anything, including bandwith. ATT and the others will need to switch to tiered pricing, which is not necessarily a bad thing. Why should lower bandwith users have to subsidize the bandwith hogs?? If there’s no tiered pricing either A) there is overuse and you get bottlenecks (now) or B) they overcharge lower bandwith users.

  2. I’ve never heard of a wireless carrier changing the price or plan of an existing customer base. Certainly they’ve changed their offerings due to competition, but that affects new customers, not existing ones. Of course there are those who would argue that a carrier has the right to do whatever they want whenever they want, but has anyone ever heard of a wireless carrier rewriting their plans in such a way that customers renewing their annual contract would have to agree to less service for the same price?

  3. First, I do not have a iPhone. I would like to know who is reporting all the network problems with ATnT. Is it Verizon getting people to believe it, or M$, or is it for real. In these days of paid shills who the heck really knows.

  4. Let’s just admit it: Obama is a serious idiot. Slightly more people got snookered than not. Okay, so a mistake was made. We can correct it starting in 2010 and finish it off in 2012.

    BTW: The brilliant windbag gets quite a neck workout without Mr. Teleprompter. I think I had the same cadence while reading “Where The Wild Things Are” aloud to my parents when I was in second grade:

  5. We are completely fed up with AT&T;. We will be jailbreaking my wife’s iPhone tomorrow and I will NOT be buying the iPhone that I had planned to buy until Apple gets an alternative to AT&T;.

    My wife bought our kids each an $80 AT&T;phone to replace their pre-paid AT&T;Go phones. The younger son decided he didn’t want to replace his old phone, so she took the unopened, unactivated phone back to the AT&T;store. They said there was a $35 “restocking charge” for returning the $80 phone. When my wife asked why they hadn’t told her about the restocking charge before she bought the phones they said the notice about that is clearly printed on the back of the receipt. Never mind that the receipt isn’t available to read until after you’ve bought the phone. They then said that if she hadn’t left the store with the phone they could have taken the phone back without the restocking charge, but that since she had left the store with the phone there was nothing they could do. Of course, this simply demonstrates that had they WANTED to they could have given her a full refund, and it wasn’t really “out of their hands”.

    It gets better. Not being one to take abuse without a fight, my wife then stood outside the store attempting to sell the unopened phone to passersby, explaining about the restocking charge and why she was trying to resell the phone. The manager of the AT&T;store then approached her saying he was going to call the mall security guard if she didn’t leave. Her response was to call the guard herself and ask how far she needed to be from the AT&T;store to be legal. The guard advised her that it wasn’t permitted to sell anything on mall property without a lease agreement. My wife then went to see the mall manager, who ended up buying the phone from her at the original retail price.

    AT&T;will never see another dime from us…EVER! No matter what! For any product or service! I am an Apple investor, and I will oppose any further dependence or association with AT&T;for Apple. Apple is a reputable company. AT&T;are simply pirates out to rape the public at every opportunity. Die, AT&T;, just die!

  6. an ooh rah for your wife zeke. The juxtaposition of appl’s service vs t’s is remarkable, has t learned nothing from appl since 07.

    Dear John above, why don’t you listen to the unamerican shill and go buy some gold from Goldline, maybe while you’re weeping about something

  7. You know, I never said building the Golden Gate bridge is the same a cell network. What I said is that both are physical. One you can see the construction that is necessary, the cell towers are much less obvious and so many folks just don’t believe they are any kind of a problem. In my neighborhood it took Tmobile three years to get approval for a new tower becaus of all the NIMBY. Just one of the problems with an instant build out.

  8. Exactly–if you think Obama–or any republican government for that matter can run anything they touch, except into the ground, you are as delusional as the germans were trying to appease Hitler. So far Obamanation has already outspent GW 9-1 in trillions of dollars. All of you who use to whine about GW and how he was ruining the future for the kids and grandkids have now ruined it even for the great grandkids as well.
    And while I’m at it, I’m tired of this corp bashing. Yes you will pay, why the fuck to do you think you should get everything for free? or that you are soooooo specail that ATT needs to bend to your whims? and remember without these “evil” corporations you wouldn’t even have a cell phone or enjoy the great life we have with them.
    Yes they will invest 7.5 bill. and gee all you invest is your perpetual griping and 39.99 a month and then you want to hog all the bandwith you can get–how pathetic and childish–as selfish as my 8 year old
    That’s all for now

  9. “ity poor AT&T;. The wireless operator with exclusive rights to sell the iPhone in the U.S. is bashed incessantly for service that rarely lives up to the elegant promise of Apple’s sleek device…”

    I know AT&T;’s users experience problems with their network than those on other wireless carriers, but to say it “rarely” is good is hyperbolic.

    “Anyone who thinks that the government would be more efficient than the private sector in this or any other matter is fucked in the head.”

    You mean like the military?

  10. A common problem with iPhones is a software issue that prevents iPhones to see WiFi connections. This issue seems to be neglected by Apple, and AT&T;. If AT&T;fixed this issue, they would most likely see a decrese in 3G internet use.

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