AT&T CEO voices regret over iPhone unlimited data model • Hacker News Board

Re: AT&T CEO voices regret over iPhone unlimited data model

#31

Post by igul222 » Sat, May 05, 2012, 12:21 AM UTC

bradgessler wrote: post #16

lusr wrote: post #6

"Apple iMessage is a classic example. If you're using iMessage, you're not using one of our messaging services, right?" It's hard to believe this is a real quote by such a senior executive. If the profitability of your business is so significantly based on a hack (SMS) that you stay awake at night worrying about it, and you didn't bother innovating by developing a real solution to the problem (pervasive real-time com…

What makes the move from unlimited data to "pay for what you eat" is the bizarre tethering restriction: they expect people to pay $25 more per month to tether without additional data. If your shifting your model to selling data, wouldn't you want to make it as easy as possible for your customers to consume more data? I don't get it. If tethering was free, I'd use more of it, and happily pay for it.

You probably know this already, but AT&T relies on most customers using nowhere near their data cap each month; allowing tethering would significantly decrease their profitability.

They can make a profit from someone who uses 5gb and pays $55 in a month, but I suspect they make more from someone who uses 400mb and pays $25.

Re: AT&T CEO voices regret over iPhone unlimited data model

#32

Post by nknight » Sat, May 05, 2012, 12:31 AM UTC

ceejayoz wrote: post #20

tnash wrote: post #11

In the end AT&T and the other carriers don't want to be "dumb pipes", but that's what consumers want. Can you imagine the same applied to water? "I'm sorry sir, but we know you used an unapproved toilet AND you went over your allotted shower minutes this month." We can only hope that it'll work out in our favor and they can stop preaching to us how we should use their bandwidth.

> Can you imagine the same applied to water? I don't get unlimited water for a monthly fee, I get charged per gallon. I'd imagine virtually all people have this situation. Utilities - water, electricity, gas, etc. - compare to AT&T's new model better than their unlimited one.

You're not understanding what tnash said at all. Each of the utilities you list is a "dumb pipe". The utility company doesn't dictate what you do with the utility, and they don't charge you a different price for running a lightbulb vs. a washing machine. It's all about how much, not what's done with it.

The telcos want to be exactly the opposite. They want to control what you do, how you do it, and how much you pay for doing it, not based on the bandwidth used, but the nature of the use. This is the antithesis of a dumb pipe.

Re: AT&T CEO voices regret over iPhone unlimited data model

#33

Post by toadkick » Sat, May 05, 2012, 2:32 AM UTC

wizzard wrote: post #26

chrisdroukas wrote: post #12

Earlier quoted context omitted.

Despite SMS being a hack that costs carriers (essentially) nothing to send [1], the reality of this situation is that telcos will be/are quickly losing one of their largest profit points to services like iMessage. Real question: Where are they going to recover that profitability from? [1] http://www.wired.com/gadgetlab/2008/12/text-messages-c/

I'm genuinely curious... why is AT&T losing so much money over iMessage? When iMessage came out I went to downgrade my SMS plan, and found you can no longer do so. It is unlimited SMS or no messaging. Not everyone I know owns an iPhone and $.20 per SMS adds up, so I am stuck paying for unlimited.

Mysteriously, AT&T changed their plans very shortly after Apple announced iMessage. Obviously they foresaw a lot of people downgrading their plans so they just did away with the tiered plans completely.

Re: AT&T CEO voices regret over iPhone unlimited data model

#34

Post by bradgessler » Sat, May 05, 2012, 6:54 AM UTC

igul222 wrote: post #31

bradgessler wrote: post #16

Earlier quoted context omitted.

What makes the move from unlimited data to "pay for what you eat" is the bizarre tethering restriction: they expect people to pay $25 more per month to tether without additional data. If your shifting your model to selling data, wouldn't you want to make it as easy as possible for your customers to consume more data? I don't get it. If tethering was free, I'd use more of it, and happily pay for it.

You probably know this already, but AT&T relies on most customers using nowhere near their data cap each month; allowing tethering would significantly decrease their profitability. They can make a profit from someone who uses 5gb and pays $55 in a month, but I suspect they make more from someone who uses 400mb and pays $25.

Honestly I never thought of that, but it makes a lot of sense. Great point.

Re: AT&T CEO voices regret over iPhone unlimited data model

#35

Post by garethsprice » Sat, May 05, 2012, 1:23 PM UTC

It does not surprise me in the slightest that the AT&T CEO spends his nights lying awake regretting that he could have screwed his customers even harder.

Can imagine him holding back sobs as he considers how he might even have held back the future for 2, 3 more years and squeezed a few more dollars out of 10000% markups on SMS, charging by the kilobyte for data and restricting access to only approved apps/websites. Poor guy, you can tell it's going to haunt him.