AT&T caps data usage with new wireless plans

[Spurminator]

Then you aren't using data intensive apps, as that's a very relative definition. Ive hit over 2 gigs in a day. No joke. The point is that every day, more and more apps and programs are using huge amounts of data. Today, it might be tough for the average person to go over that... what about in a year? It's easy to say that's its no big deal, but AT&T is doing this to make money. Meaning they intend people to top the cap.

What I don't understand is how some people actually defend this policy... as if at&t would be completely honest in order to save it's customers money. Does that sound like a successful business model to anyone? They're doing this for a fairly obvious reason.

It seems like a way to control cost of sales and SAVE money rather than generate more revenue. Tomato/tomahto maybe, but I agree with scott... anyone who doesn't use more than 200mb (most people) will now save money.

And I agree that apps are getting more advanced and will likely require more data usage over time, but more Wifi zones are popping up with time as well. Eventually they'll be everywhere and it won't matter, unless you really need to download a movie in the middle of the desert or something.

[Sir Loin]

I rarley use the 3g to surf anyway its too slow compared to wifi. But im glad its there when i need it. Ive never used more than 30 mb but now i will gladly use it way more for others who wont have the unlimited

[Cry Havoc]

It seems like a way to control cost of sales and SAVE money rather than generate more revenue. Tomato/tomahto maybe, but I agree with scott... anyone who doesn't use more than 200mb (most people) will now save money.

And I agree that apps are getting more advanced and will likely require more data usage over time, but more Wifi zones are popping up with time as well. Eventually they'll be everywhere and it won't matter, unless you really need to download a movie in the middle of the desert or something.

4G will take over before wifi does. And 5G will likely be far more desirable than most wifi connections... in fact the higher end of 4G is faster than most wifi is now.. So the days of Wifi actually might start decreasing. I remember in the early 2000s it was predicted that entire cities would be wifi by now... it hasn't come close to happening, and in many places it costs money.

[Cry Havoc]

What apps are you using that you use 2GB in a day? Jeez.

I tether. Enough said. And it's something that will be more and more prevalent in the future.

I question how people can think that "200 mb" is enough for most people because they don't use much data, when in fact surfing the internet on a phone hasn't even really been realistic until the iPhone 3GS came along.

The age of truly surfing on a mobile device is only now upon us... and everyone thinks 200 mb is enough because it's been that way in the past.

I have news for you... computers today need more than 640k of RAM, fellas. It's baffling to me that people still look to the past as a baseline of what technology will be like tomorrow.

640k wasn't enough RAM, 1 GB wasn't enough hard drive. 200 mb will NOT be enough data, and neither will 2 GB. This isn't something I even think is debatable. It just seems so right now because people are just getting their hands on phones that can actually surf the web in a modest fashion.

[Sir Loin]

How do you tether are you jailbroken?

[PM5K]

640k wasn't enough RAM

You totally stole my line.

[Cry Havoc]

How do you tether are you jailbroken?

As any self-respecting IT guy should be, yes, I'm jailbroken. The iPhone is kind of a joke without jailbreaking, compared to what it can do when it's not wrapped up in Steve's straight-jacket of love.

You totally stole my line.

Gotta be quick on the draw 'round these parts.

[Drachen]

I think that it is fairly naive to think that the whole purpose of this may be to make their 4g network more attractive to all when it is introduced. When is it supposed to come out? A year or so? Perhaps they are investing heavily in the 4g network, and it will be good. Maybe they want people to jump the 3g ship as soon as 4g is introduced (due to their notoriously bad 3g service, and their [probably] lack of desire to invest much more in their 3g network since 4g is on the way). They can do this by creating a few incentives:
1. speed, this incentive is built in. 4g is obviously faster than 3g.
2. Unlimited data plans, maybe they offer this for $40 a month (completely made up number, but who knows) for their 4g service.

This time next year, no one will remember that they introduced these data caps, and will allow themselves to be convinced to go to the 4g network. If At&t decided to introduce their unlimited 4g network, and issue data caps all on the same day, I think that the public perception would be that they are now being forced into 4g and that "forced" feeling would cause ill will.

By all accounts this is a money losing move by At&t, and since companies aren't in business to lose money you have to run through the reasons as to why they would do it. For me it comes down to behavior modification (like what I described above) or attracting a higher volume of customers with a lower profit margin. I think the latter is unlikely as they are cutting their data prices far too much (half price for 57-65% (depending on whose estimates you are looking at) of their customers? 17% off for the remaining customers up to the top 2%?).

What do yall think?
BTW this is all conjecture, I have no knowledge of the amounts they are spending on what. Just a hypothesis of mine.

[Cry Havoc]

I think that it is fairly naive to think that the whole purpose of this may be to make their 4g network more attractive to all when it is introduced. When is it supposed to come out? A year or so? Perhaps they are investing heavily in the 4g network, and it will be good. Maybe they want people to jump the 3g ship as soon as 4g is introduced (due to their notoriously bad 3g service, and their [probably] lack of desire to invest much more in their 3g network since 4g is on the way). They can do this by creating a few incentives:
1. speed, this incentive is built in. 4g is obviously faster than 3g.
2. Unlimited data plans, maybe they offer this for $40 a month (completely made up number, but who knows) for their 4g service.

This time next year, no one will remember that they introduced these data caps, and will allow themselves to be convinced to go to the 4g network. If At&t decided to introduce their unlimited 4g network, and issue data caps all on the same day, I think that the public perception would be that they are now being forced into 4g and that "forced" feeling would cause ill will.

By all accounts this is a money losing move by At&t, and since companies aren't in business to lose money you have to run through the reasons as to why they would do it. For me it comes down to behavior modification (like what I described above) or attracting a higher volume of customers with a lower profit margin. I think the latter is unlikely as they are cutting their data prices far too much (half price for 57-65% (depending on whose estimates you are looking at) of their customers? 17% off for the remaining customers up to the top 2%?).

What do yall think?
BTW this is all conjecture, I have no knowledge of the amounts they are spending on what. Just a hypothesis of mine.

Or they could have completely fudged the statistics about usage.

OR they know that in the future, a 200mb cap is going to net them a sizable return in overage fees.

[DarkReign]

LOL

I just checked my iPhone usage. I have owned it for a year+ and have never reset the usage.

950MB Received
75MB Sent

[Drachen]

Or they could have completely fudged the statistics about usage.

OR they know that in the future, a 200mb cap is going to net them a sizable return in overage fees.

Point A: A third party, Consumer Reports, verified their stats
Point B: 200 mb cap on 3g. By the time the "low end" users go over the cap, 4g will probably be very prevalent, and even then, they have a 2 GB plan for 17% less that they will have a hard time catching up to.

My only other explanation for this would be that they are trying to set some sort of precident for capped 4g. This would kill their bottom line, though as droves and droves of customers leave.

[Cry Havoc]

Point A: A third party, Consumer Reports, verified their stats
Point B: 200 mb cap on 3g. By the time the "low end" users go over the cap, 4g will probably be very prevalent, and even then, they have a 2 GB plan for 17% less that they will have a hard time catching up to.

My only other explanation for this would be that they are trying to set some sort of precident for capped 4g. This would kill their bottom line, though as droves and droves of customers leave.

My main concern is that this sets a bad precedent. I refuse to believe AT&T is doing this to save their customer's money. If most users are under the 200mb and almost all of them are under the 2 GB mark, why is it even a problem for AT&T? Why do they need to regulate it if most people are only using 50mb of data a month?

[Cry Havoc]

http://www.huffingtonpost.com/josh-l..._b_604480.html

Update: Karl Bode and Stacey Higginbotham describe how AT&T made its change in pricing precisely because of the new iPhone's use of more data; users think twice before downloading a video, but get charged an arm and a leg once they do.

Yay, the iPhone 4 is here. But today, instead of thinking about the latest version of the game-changing smartphone, I'm mourning the end of the era of the unlimited data plan.

Last week AT&T announced a new tiered pricing model for data services for Apple's iPhone and iPad devices, which charges users $15 for 200 MB of data and $25 for 2 GB, plus an additional charge for tethering (more on that in a bit). While some think the new model will ultimately be good for consumers, others disagree. David Pogue, while having issues about the tethering, thinks the scheme is a "very delicate balancing act that benefits almost everyone, customers and AT&T alike."

We — like many others — respectfully disagree.

AT&T's argument for its new scheme is that while 98 percent of iPhone users use 2GB or less of data a month, the consumption of the remaining 2 percent is buckling its network. So with the launch of the iPhone 4, the 98 percent of folks who are just average data users can now choose cheaper plans, based on their level of usage, and save some money while they're at it. So what's not to like?

As it turns out, there's more than you'd think. Free Press', Chris Riley has already pointed out that beneath the appearance of lower prices lies the gouging of consumers and the stifling of innovation.

Here's how AT&T's plan really works:

* Punitive overage charges. The "DataPlus" plan offers 200 MB of data for $15 a month. If you go over this amount — easily possible if you stream a lot of music and video — you'll be charged another $15 per additional 200 MB. The "DataPro" plan offers 2GB of data for $25 month, with a $10 charge for each additional GB. Although AT&T will refuse to provide cost information unless legally ordered to do so, $10 per GB is almost certainly more than it costs AT&T to provide the service — and $75 per GB is highway robbery.

* Only the beginning of mobile broadband. Maybe $10 per GB sounds reasonable to you, but remember that mobile broadband is still in its early stages. The fact is, today's heavy users will be tomorrow's average user. 
Just today, Steve Jobs announced that the iPhone 4 will include a Netflix app. That's pretty cool, except for the part about streaming online video, which quickly uses up a lot of bandwidth. New iPhone users with a $15 a month plan should get ready for some serious overage charges to stream The Blind Side. That's right, a two-hour movie would use more than 200 MB in data, blowing a DataPlus user's data allotment in one viewing.



And to top it off, Cisco estimates that an average mobile user will consume 7 GB of data by 2014. For that, a "DataPlus" user would be charged $305 a month, and a "DataPro" user would owe $75. AT&T's pricing scheme will punish new smart phone owners just as they're getting up to speed with the mobile Web. 


* Greedy tethering. For an extra $20 a month, iPhone users in the U.S. can finally tether their phones' data plans to their laptops (many smartphone users can do this already, at no additional fee). Of course, the data used by the laptop will come out of the same bucket as the data for the iPhone, making it much easier to go over your 200 MB or 2 GB of monthly data. As David Pogue put it, charging $20 a month for no extra data "seems a little greedy," especially when AT&T is already charging for the extra data usage. That's an understatement. We call it blatant price gouging.

* Killing innovation. Not only does this overcharging break the bank, but it's also an incredible disincentive to using data-heavy applications like Netflix and Pandora, not to mention whatever new applications will exist in four years. How will the next wave of mobile entrepreneurs produce innovative apps, with customers constantly looking over their shoulders at overage charges? (GigaOM's Stacey Higginbotham has more on this).


It's likely that Verizon will follow AT&T's lead and introduce its own tiered scheme soon enough (though some suggest that Sprint and T-Mobile, which are both losing subscribers, have bandwidth to spare so they will likely keep their unlimited plans). If Verizon does go that route, metering by the two largest mobile carriers would all but ensure that wireless broadband never becomes a true compe or to wireline broadband, and that broadband users continue to pay Verizon and AT&T double — once for Verizon FiOS or AT&T U-Verse, and again for Verizon or AT&T wireless.

As we continue to see explosive growth and innovation in the world of devices and applications —think how mind-bending the iPhone 4 or the HTC Incredible would have seemed to consumers just a few years ago — the future of wireless broadband service is grim.

[scott]

Just as minutes have become increasingly cheaper over time, why wouldn't you think data would do the same as more infrastructure is built?

And to top it off, Cisco estimates that an average mobile user will consume 7 GB of data by 2014. For that, a "DataPlus" user would be charged $305 a month, and a "DataPro" user would owe $75. AT&T's pricing scheme will punish new smart phone owners just as they're getting up to speed with the mobile Web. 


For starters, the market wouldn't sustain that kind of pricing and AT&T would fall flat on its face. But more importantly, applying current pricing based on current supply factors to estimated future demand without incorporating changes to future supply is a pointless conversation. The kind us Economics professors give F's to in school.

Obviously AT&T feels this is a cost-saving or revenue-generating move, otherwise they wouldn't do it. But acting like all customers are going to get screwed is naive. You are part of that 2%. AT&T has decided that you and the rest of the 2% can walk, they'd rather attract the rest of the 98% with lower pricing. Just as AT&T is doing this to aid their bottom line, they will adjust the usage caps as the market dictates - exactly the same way it's happened with minutes and SMS usage.

[scott]

My main concern is that this sets a bad precedent. I refuse to believe AT&T is doing this to save their customer's money. If most users are under the 200mb and almost all of them are under the 2 GB mark, why is it even a problem for AT&T? Why do they need to regulate it if most people are only using 50mb of data a month?

Anyone who believes that is delusional. Obviously it's about AT&T first and foremost. I don't think anyone has claimed otherwise.

And why does it cause a problem for AT&T? Well, because the 2% who exceed 2GB are probably like you - they don't just exceed it by a GB or two a month, they exceed it massively. AT&T isn't trying to save anyone but themselves money - and the way to do it is to drive people like you out of their market.

The most passionate fans are the ones who are most vocal and be a champion for you or a thorn in your side - but in the end, it's the rest of the 80% (90%, 98%) who pay the bills. Losing out on the hardcores can sometimes be a tough, but sometimes the right business decision.

[Drachen]

My main concern is that this sets a bad precedent. I refuse to believe AT&T is doing this to save their customer's money. If most users are under the 200mb and almost all of them are under the 2 GB mark, why is it even a problem for AT&T? Why do they need to regulate it if most people are only using 50mb of data a month?

These were exactly what I touched upon in my post regarding the 3g/4g switchover.