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AT&T Learns Exactly the Wrong Lesson About Data Usage

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Re: AT&T Learns Exactly the Wrong Lesson About Data Usage

#71
post #37
post #10

Earlier quoted context omitted.

I think he wants to say AT&T should get the users hooked to using lot of data, so they as a subscription company can keep making money from users for a longer time.

Exactly. If you're AT&T, when households are looking at their bills for stuff to cut, you don't want them looking at their data plan and saying, "well, I guess I don't use it very much..." You want the gym membership to get the axe.

But most AT&T customers are locked into long-term contracts, so they can’t just up and decide “I’ll cut the data plan”.

My startup was recently bought by Nokia, and unsurprisingly, one of the fringe benefits of working for Nokia is getting a free smartphone (GSM 3G) with an unlimited data plan (T-Mobile, thank God). My wife and I looked into cancelling our Verizon family plan and moving to just one line for her, but the early-termination fee is so high that it’s cheaper for me to just keep the Verizon phone. And since our Verizon plan has free in-network calls, it’s also cheaper for me to carry the Verizon phone, so that she can call me on it.

The flip side of this is that people who abandon their carrier because of network issues will be more like a slow leak than a stampede, so AT&T executives with an eye on quarterly profit results would rather do anything but invest heavily in building out their infrastructure.

Re: AT&T Learns Exactly the Wrong Lesson About Data Usage

#72

I too dislike how AT&T foisted these prices on us - but I disagree with the author here. He seems to be advocating that there's something wrong with not consuming 1.5-2GB a month. He's a heavy user - cool, but I see no reason for the majority of the world to be just like him. > "Why are so many people using so little bandwidth? Or, put another way, you should be ashamed of yourself if you sell a device like the iPhon…

> Honestly, I don't think anyone has been encouraging people to use less bandwidth. For most users a few hundred megs a month is plenty, and there's nothing wrong with that.

I don't think they're outright trying to discourage usage, but any cap whatsoever will make people paranoid about using it up, and have the effect of making them use it less. If there's no limit, you never have to worry about it, and will feel free to use it all the time. But if you know that you could hit that cap at some point, you'll think twice before starting up Pandora or YouTube, even if there's no reasonable way you could hit your cap.

Re: AT&T Learns Exactly the Wrong Lesson About Data Usage

#74

There is usage-based billing for utilities , so it is theoretically possible to do this fairly with other things. However, it requires the corresponding regulations: for gas and electricity, you have meters; you also have labeling requirements on the products you buy, so that you can tell what they're going to be using. Apps don't have meters, and they don't have any mandate to tell you that they're hogs. Therefore,…

I see lots of geeks rooting their Droids and installing ntop or similar utilities when this sad day comes.

Re: AT&T Learns Exactly the Wrong Lesson About Data Usage

#75
post #47

Earlier quoted context omitted.

I think you are missing the key point: Apple wants people to use their fancy devices more , not less. You spend this money on this awesome device that does awesome things, Apple makes money when you use it (via iAds, via google searches, via many things) and AT&T is saying to their customers "don't use your device too much!" I'm betting Steve is totally pissed off at AT&T right now.

Wouldn't poor 3G speeds also be a good reason for someone to use their iPhone less? If AT&T's policy changes skim off the top 2% of heavy users the remaining 98% are going to end up with a better experience and possibly use their iPhone more. It's hard to frame it only in terms of bandwidth too. Apple must make more revenue off the person who buys a $10/20MB game than they do from another user downloading the free Ne…

I've never understood the argument that capping data plans will improve the "experience" for the non-heavy users. Capping doesn't change the fact that AT&T does not have the tower capacity to support as many iPhone users as they already have, so even if they can curb the 2% of heavy users, the other 98% are still overloading their towers and receiving poor service.

The only thing data caps do is generate more money for the provider by charging heavy users for the excess data they use. Whether they actually use that new money to improve their towers is a completely different topic; they certainly haven't been improving capacity well enough for the past three years, when they already generate plenty of revenue. Why will it be different with caps in place?

Edit: I saw the same thing happen with Time Warner Cable in Rochester, NY. Just s/AT&T/TWC/ and s/towers/copper/ and it's the exact same situation.

Re: AT&T Learns Exactly the Wrong Lesson About Data Usage

#76

The author really hasn't considered it from AT&T's perspective. On one end, they're hearing complaints about their terrible network, and on the other end, they're facing large costs to improve their infrastructure to support people with unlimited accounts. Aside from the comparatively small increase in subscriptions they'll get for their improvements, they'll see no income for their investment. However, if AT&T were…

They might not be facing such large infrastructure cost if they had continuously upgraded their network. I remember reading last summer, that the last 8 quarters (basically since they got the iPhone) AT&T network investment had gone down.

Re: AT&T Learns Exactly the Wrong Lesson About Data Usage

#77

Earlier quoted context omitted.

I think you are missing the key point: Apple wants people to use their fancy devices more , not less. You spend this money on this awesome device that does awesome things, Apple makes money when you use it (via iAds, via google searches, via many things) and AT&T is saying to their customers "don't use your device too much!" I'm betting Steve is totally pissed off at AT&T right now.

So we should force iPhone users to pay for unlimited bandwidth so that we can try to force them to "do more awesome things" with their phone? What this argument is not taking into consideration is that some people don't use their device as much as others, and they do so by choice . Plenty of people will take a $10 discount to cut their phone usage a bit, and be happy that someone offered them the choice. Personally,…

Offered tiered pricing. $5/mo for 100MB, $10/mo for 250MB, $20/mo for 1GB, $30/mo for unlimited.

Re: AT&T Learns Exactly the Wrong Lesson About Data Usage

#79
post #47

Earlier quoted context omitted.

Wouldn't poor 3G speeds also be a good reason for someone to use their iPhone less? If AT&T's policy changes skim off the top 2% of heavy users the remaining 98% are going to end up with a better experience and possibly use their iPhone more. It's hard to frame it only in terms of bandwidth too. Apple must make more revenue off the person who buys a $10/20MB game than they do from another user downloading the free Ne…

I've never understood the argument that capping data plans will improve the "experience" for the non-heavy users. Capping doesn't change the fact that AT&T does not have the tower capacity to support as many iPhone users as they already have, so even if they can curb the 2% of heavy users, the other 98% are still overloading their towers and receiving poor service. The only thing data caps do is generate more money f…

>I've never understood the argument that capping data plans will improve the "experience" for the non-heavy users.

It isn't a difficult concept. A very small number of people contribute significantly to the network load. Yeah, ideally there's more capacity than anyone can ever use, but back here in reality that would be remarkably expensive to fulfill.

It's the same thing with crime, btw: A very, very small percentage of people are responsible for the overwhelming bulk of crime.

Re: AT&T Learns Exactly the Wrong Lesson About Data Usage

#80

i speculate AT&T can't support everyone at 2GB without massive infrastructure upgrades. which certainly impacts their pricing strategy.

Indeed, that's exactly the point the author doesn't get. AT&T is doing this specifically to reduce usage, without pissing off their customers. In exchange for giving people a cut in their data plan costs, AT&T's system load goes down. That means a more responsive and reliable network for everyone.

And it's a lot easier than spending money on upgrading their infrastructure.

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