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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.
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.
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
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!" ![]()
StockScouter data provided by Gradient Analytics, Inc.
Quotes supplied by Interactive Data.
MSN Money's editorial goal is to provide a forum for personal finance and investment ideas. Our articles, columns, message board posts and other features should not be construed as investment advice, nor does their appearance imply an endorsement by Microsoft of any specific security or trading strategy. An investor's best course of action must be based on individual circumstances.
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