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What It Means That AT&T Is Considering Different Data Plans For The iPhone

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AT&T (NYSE: T) is considering the introduction of a variety of data plans that would limit some web surfing for smartphones, including the iPhone, Reuters reports. The move is part of a growing trend by carriers that are looking for a way to manage soaring data usage on their networks, while providing good service for all—and, of course, making money.

Right now, carriers are offering all-you-can-eat data plans to drive user adoption. But the downside of the simplicity, is that it allows everything from light-weight email and instant messaging to applications that hog the network, like streaming video. As a result, carriers, like AT&T, have made the unpopular decision to block heavy bandwidth applications, the SlingBox, that might bring down the network. Reuters is reporting today that Ralph de la Vega, the head of AT&T Mobility, told the Reuters Global Technology Summit in New York yesterday that they are looking for an alternative way to deal with the problem. Rather than lowering the price for all of its unlimited data plans (which is $70 for iPhone users), it could offer limited plans at a lower free. De la Vega: “Right now we continue to study what is the best thing that is available, not just from an iPhone point of view, but what you can do to stimulate additional demand.”

We talked to Merav Bahat, VP of Marketing, of Israel-based Flash Networks, which helps operators manage data demands, to get a better idea of what that means. He said operators should “give users the choice to choose the right pricing plan for them based on usage patterns—don’t just block them, communicate with them.” More after the jump…

Bahat said under this philosophy, carriers may craft a number of data plans that could be based on the applications subscribers like to use. For instance, subscribers may want unlimited access to social networks, email and YouTube. But if they exceeded a certain bandwidth cap, they’d pay by the byte. In addition, the carrier may provide access to high-bandwidth apps on the weekend, but would charge extra during the busier 9 to five weekday hours. Bahat: “I don’t believe in blocking. I believe in managing. If a user wants to do peer-to-peer, they pay a bit more.”

It remains to be seen how customers would react to this change. Potentially, consumers could welcome it, especially those who don’t use a ton of data. Who knows, their bills may even go down? Likewise, consumers who are dying to use data-hungry applications may be willing to pay for additional access—especially if the carrier is blocking it altogether. Already, there’s been backlash when carriers go back and clarify what ‘unlimited’ really means and caps bandwidth use at an arbitrary figure. Bahat said it’s all about communication, and the carrier being completely open with their subscriber on what is and isn’t available. Bahat: “Today, there’s zero communication between myself and my operator. I think the future is communication and more interaction with the user, and for them to ask: ‘What do you want to do next?’ We want to put the customer in the driver’s seat.”

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May 20, 2009 3:26 PM ET
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Posted In: Social Media, Technologies / Formats, Companies, Apple, AT&T

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  • douchbag

    You couldn't be any wronger if you tried, Datauditor. You need to get people over to a data plan. this won't have an impact on text for another couple of years. Data is the highest profit margin item AT&T sells and email can't and won't replace text which is essentially IM. You can't beat the illusion of real time contact (without having to talk) that text messages provides. In a couple of years, thanks to companies like Boost Mobile, who offer everything for $50 plans. Eventually IM (Instant Messaging) will replace text messages but for now, most phone companies won't let IM run in the back ground, which means you won't get a audible indicator when you have a message.

  • Datauditor

    The head of AT&T Mobility is thinking rationally, but the reasoning is flawed.  The contradiction is "more but less".  AT&T is assuming that cheaper data plans attracts more users that use less bandwidth.  And the revenue is a breakeven or slight growth with strong user take.  The flawed reasoning is that a high user load will also block access.  The Coachella Music Festival sponsored by AT&T was evidence.  And cheaper users probably means e-mailers.  The revenue threat is that texters become e-mailers.  The expected trend is that texting millenials will grow up into instant messagers.  Cheaper data plans escalate the trend.  The $20 unlimited texting plan becomes a $10 or $20 data plan.  The free SMS control channel for carriers becomes a 3G expense with e-mail and instant messaging.

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