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AT&T may have to limit iPhone users

Customers use their iPhones too much and have caused network problems in markets where their popularity is huge.

Posted by Charley Blaine on Wednesday, December 9, 2009 8:58 PM

OK, you truly wild and crazy iPhone users.

 

You know who you are: the ones who check out every application, play every game, call up every piece of news and check out every restaurant within 100 miles.

 

You are causing AT&T (T) a big problem. You're swamping the system, and AT&T, which has an exclusive right to market the iPhone in the United States, wants you to get a life and dial back.

 

How AT&T plans to get you to cut back isn't quite clear, The Wall Street Journal said today. But they won't slap you around. They'll offer incentives.

 

AT&T's problem is a problem for everyone in the wireless industry: how to cope with exponential growth in the use of data services such as video and Internet browsing, which require more bandwidth.

 

The dilemma, the Journal noted, has been particularly acute for AT&T because of the millions of customers using Apple's (AAPL) iPhone, the iconic smart phone.

 

IPhone users so love their phones that they use them all the time. The problem is especially big in New York and San Francisco, two of the trendiest towns around.

 

The rate of broken calls and data feeds has grown so fast that Verizon Communications (VZ) has launched an ad campaign to get AT&T customers to switch.

 

The average iPhone user consumes five to seven times more data on a monthly basis than an average subscriber who mainly uses a handset for phone calls, research firm Sanford C. Bernstein says.

 

Even compared with the average smart-phone user on a high-speed network, iPhone owners use twice the amount of data.

 

So, iPhone user, you're too good a customer. And you cause an additional problem.

 

AT&T may have to invest more in network investments -- switching gear, cell-phone towers and the like -- because you like your iPhone so much. That may eat into AT&T's bottom line.

 

Result, Toni Sacconaghi, a Bernstein analyst, told the Journal: "The economics of the iPhone are not as rosy as they might first appear."

 

So, what incentives might AT&T offer? Sorry, they won't pay you not to use your phone.

 

But the options include instituting usage fees that charge customers based on how much data flow through the device.

 

Right now, you can get a calling plan from $40 to $100 a month for an iPhone -- plus $30 a month for unlimited data. The average iPhone users pays $95 a month for the service.

 

The telecom giant could also charge $5 to $20 a month for the right to send text messages.

 

It could -- gasp! -- slow down the data flowing to your iPhone if your usage is hurting other customers.

 

AT&T has tried reasoning, the Journal said. They've showed some users just how much data they use. Ralph de la Vega, who runs AT&T's wireless and consumer businesses, told the paper that most had no idea and cut back on their own.

 

The next question is whether AT&T will have to make an offer the iPhone user can't refuse.

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1 - 15 of 508
6/06/2010 1:10 AM
www.techdimwit.com

what ATT should have done is make everyone a 250MB data customer and if they go over then make them an unlimited plan customer.

they should offer unlimited plans anyway and push 4G networks which can handle the data. This is the future and soon unlimited data will have to be an option. This will stiffle online advertising and growth if they decide to pursue with their current option.
12/29/2009 12:42 AM

Hmmm (tisk, tisk,tisk).

This will be a gripe to some abusers of the cellular network who may or may not have posted (you know who you are) on this article and somewhat to AT&T.

I don't live in an area where one would typically experience low quality 3G service from AT&T so my mention here won't be a direct result of my good relationship as a customer of said company. That being said, I would still like to make some observations based upon what I have read in the article and posts.

To AT&T, I would like to mention that you shouldn't offer, or continue to offer an "unlimited package" of any kind if your infrastructure cannot support a customer base on it. You are now seeing how the successful adoption of a few products (hardware and services) are beginning to take down your network in certain areas. If indeed you advertise capability of supporting total use of iPhones/smartphones on your system then you better darn well guarantee it. But, if you find yourselves coming up short on bandwidth with increased sales of said devices in certain localities then publicly announce reasons why BEFORE you curtail sales/services to those areas. At least let people know before you create sour binding relationships. In those times where you find yourselves temporarily and unexpectedly short on bandwidth in certain areas due to circumstances beyond your control, use that free texting feature (you use to advise or advertise) to make a public appeal for wise use of resources until the heavy use crisis period is over. This is common courtesy! Believe me, a number of casual or recreational users will respond by freeing up some bandwidth in order to be kind to those who REALLY need it, maybe some will have the conscience to recognize the probable collapse of the communications network THEY SHARE would be even worse. Next, use those statistics to determine where capacity upgrades should be applied and act upon implementing them immediately! You will only be able to "cry wolf" for so long. Ideally, you should be looking at statistics to keep ahead of demand anyway! Be a responsible corporation and manage your infrastructure in a customer friendly way.

We users are a spoiled lot, aren't we? But some much more so, including but not limited to the 3% hogging 40% of the network mentioned in the article. Is it really necessary to be continuously connected to "social networks" jabbering/texting/facebooking/myspacing about inane things such as: new nails, sports team scores, burned roots from the hair salon, "THAT botox session was PAINFUL", what's for dinner?, OMG hez so dum!, did you score last night?, I (heart) u, PAW, etc through a cellular network? Wouldn't social relationships be much better if people met in person rather than with phones stuck to ears/fingers with butts either sitting somewhere or riding in/navigating SUVs/cars/motorbikes on public thoroughfares? Is it REALLY better to Duke Nukum on 3G instead of wifi on a mobile? Better yet, a home computer with a BIG screen over ethernet? Is it REALLY better to view a video in real time over 3G rather than wifi or downloading via iTunes at home for later viewing? Will it kill anybody to curtail inane use of 3G networks? Is it really necessary for certain people to have such total mobile connectivity to whatever they define as their "network" every waking moment of their lives? COME ON!!! Be reasonable.

I work in the utility industry (no, not communications) where it has seen a few public appeals to necessary use of energy or the contracted curtailment of certain types of non critical use during unexpected heavy demand or sudden loss of capacity (usually severe weather or equipment failure related). These tactics work, from a company standpoint it prevents forced outages or rolling backouts and preserves the infrastructure for the necessary needs of all customers. Planning departments are always trying to keep ahead of such instances but an unforseen circumstance may still arise making a public appeal necessary. Furthermore, since we as customers (me included, no discounts here) pay for wh
12/28/2009 7:23 PM
This story sounds very familiar. Rewind...It's  the 90's and AOL has exploded on the scene. They are taking high fees for membership and a dial-up connection. The problem is that you get a busy signal when you try to connect. AOL had oversold it's capacity. They were ordered to stop selling subscriptions and add capicity for their existing members. ATT is a poster child for a government intervention. They are failing to meet contract obligations to their subscribers. Keep complianing ATT. Uncle Sam will have a new years gift for you. REGULATION!
12/28/2009 2:47 PM

can't wait for the new Verizon commerical on this and saying "NYC isn't ready for the iPhone". i wonder if they can't use Seinfeld's meme and have a Cell Nazi shouting, "No cell for you! Next!" Hot

12/28/2009 2:23 PM
This is all a side-effect of the exclusivity deal that AT&T has on the iPhone.  If other carriers such as Verizon and Sprint were allowed to support the iPhone, the load would be more balanced and AT&T wouldn't have the problem.  If AT&T is suffering at all, it's because of their own greed.  So I don't feel sorry for them one bit.
12/28/2009 2:08 PM
How do you offer unlimited data and then tell someone how much data to use...?  I feel the company underestimated its customers needs for high-speed data.  The iPhone was introduced with all its bells and whistles and people took advantage of it. Why else would you shell out $500...so I can look at it and think this is a cute phone...no to get the most of what I have...and that is what an unlimited plan is for...to allow me to get the most of what I have.  Now it is ATT time to step up and not by limiting my usage but by upgrading so that I can still use my phone as much as I want...isn't that the definition of UNLIMITED?
12/16/2009 10:35 AM
I have an iphone, and they have always charged for text messaging.  What's new???
12/14/2009 8:44 AM
iPhone users are exceeding no quota regardless of how much data is used.  The plan is unlimited.  If AT&T was not prepared to handle this then they should not have agreed to it...quite simple, really.  If AT&T wants to mess with customers who are paying top tier prices for their phones than AT&T will lose those customers.  AT&T is already more expensive than all other companies when you consider the ridiculous prices that you have to pay for text messaging.  AT&T does not even give free texting for multiple phones on the same plan.  If AT&T starts charging me more to use my phone I will buy out my plan and leave.
12/12/2009 1:51 PM
katrina, granted yes it is wireless and those things you mentioned don't get in the way, it still does cost to upkeep those towers.  Electricity, routine maintenance, etc.  Where lines on poles just sit until there is a problem and then they fix it, if the towers aren't maintained you can end up with mass outages if they aren't properly maintained.  This coming from one who worked in the industry.  Truth be told, it actually costs more to maintain a cell network then to replace a length of cable once every 10-15 years, but it isn't near as high as we think.  Notice NO cell company ever publishes these numbers?
12/11/2009 8:05 PM
Ditto!Open-mouthed
12/11/2009 7:00 PM
Who keeps saying Sony? Apple makes the iPhone.

For voice, plus data, plus unlimited text messaging I pay around $150 per month for my iPhone. Ridiculously higher than regular voice service. If they put a cap on usage, I'll just switch to Verizon. Or perhaps I'll just install skype and go without cell service altogether. Is someone really suggesting users who shell out $30 for a data plan, plus $20 for unlimited text messaging, plus $50 - $120 per month for voice (not including taxes and fees), should also have to pay usage fees? 

A consumer can get cable, internet, and VOIP for less than $100 for use at their residence. Why should it cost so much more to do the same things on a cell phone (which by the way, is meant to replace a laptop in many cases :-). At least with cell service, the companies do not have the expense of digging up the ground or putting poles and wires up - it's wireless - less capital & equipment. No wires to break when a tornado, ice storm, or errant tree branch decides to go the wrong way.

AT&T would be absolutely insane to put a cap on iPhone bandwidth use. The android is a viable alternative and google voice lets people talk without paying $150 a month. Not to mention going without cell service altogether and relying on wireless hotspots.
12/11/2009 6:50 PM
Good point....! If it hasn't occurred to iPhone yet, hope they are reading this.
12/11/2009 5:38 PM
I wonder if AT&T suit Ralph de la Vega still works for AT&T after Apple executives woke up yesterday morning and discovered that he had single handedly torpedoed their entire Christmas iPhone marketing plans for 2009, and for half of 2010 with one fell foot in his mouth. Good work Ralph. Got any job offers coming in yet? Don't worry, they will come...really!
12/11/2009 3:27 PM
D_princess, Sony doesn't hold the iPhone, Apple does.
12/11/2009 2:56 PM
hmm.. AT&T's complaint amuses me, especially as (at least in my area) advertise themselves as the fastest 3G (nevermind how spotty it is).
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