On AT&T and the new pricing plan....

Today, AT&T announced new pricing plans for Smartphones.  Gone is the Unlimited plan for new subscribers, but old subscribers will be able to keep their existing unlimited plans for the new phone.

This is huge!  I ran to my usage log a few minutes ago to see how much data I have actually used since I got the phone.  I am certain that it is a lot more than shown, since I mainly use it on a WIFI network, so the limits appeared to be okay for me.  But what about for others?  I can visibly see this new pricing structure putting a serious dent in 3G music listening, not to mention video streaming.   Perhaps that was the intent.

In reviewing my own data usage, since I have never reset it, it shows that I have downloaded 2 gigabytes of data over 19 months of usage, while sending a total of 300 mb.  I also checked my usage for the previous month and noted that it was in the megabytes and not gigabytes, something that I found very interesting.  Perhaps my usage was not as intense as I had first imagined.  Or perhaps I am lucky to have WIFI wherever I go and just use 3G when that is not possible.  Remember, AT&T counts email as data and I have a lot of that coming in on a constant basis.  They also count all of those "pings" for badges that show that you have a text message or a message in an app.  Streaming data is also included.

The New AT&T Data Plan:

Data Plus  :  200 mb of Data for $15 per month. If you go over, you get another 200mb for $15.

Data Pro   :  2 GB data for $25 per month.  If you go over, you get an additional 1GB for $10.

According to AT&T, 65% of their smartphone users use less than 200mb per month.

While 98% use less than 2GB per month on average. 

AT&T provided a Data Calculator so that you can calculate your need at this time.  -> Data Calculator

Information provided from the AT&T website (AT&T) to go into effect on June 7, 2010.


There is an uproar across the internet right now, with blogs requesting that a letter be written to the CEO of AT&T.   However such a letter, as discovered by Giorgio Galante, may lead to a cease and desist letter from AT&T.  Such customer service!  No wonder why we are seeing some major rumblings about leaving AT&T.  This may also be the reason AT&T is preparing for what may indeed be inevitable:  The iPhone opening up to other companies in the US.   At the rate that things are going, with data fee changes and a contentious public relations policy, AT&T may be unlucky if a large majority of iPhone owners decide to take up residence with another provider.

However, there may be more to the changes in rates.  One option could be that AT&T knows what's coming down the pike.  Certainly a new iPhone. One that will compete with Google's Android on many levels.  But one that will usurp more bandwidth than AT&T can provide, particularly in the hardest hit metropolitan areas of New York and San Francisco.  What is crazy now, could be madness in two weeks as the new phones come into play.  It could also mean that AT&T knows about the iPad and its 3G demands.  The fact that NYC ran out of 3G iPads is testament to what will happen once Apple brings supply up to satiate the demand.   All of this 3G activity from two Apple devices, which may include Video Conferencing, is bound to obstipate the bandwidth.  Especially in the first two weeks of the release.  Let's see some of the rumors from various web sites for next week, which could account for AT&T putting a sweeper in the defensive line:

Rumor 1:  A video camera on the iphone.  Talk about bandwidth hogging.  Who wouldn't stay on line forever over 3G (if it worked), sucking up bandwidth forever.

Rumor 2:  (Confirmed Fact):  Pandora and other music entities will be allowed to run in the background.  More bandwidth hogging, this time 8 hours per day from work, subway, bus and anywhere that allows a cell phone.

Rumor 3:  Tethering.  I used to tether my Palm Vx to my cell phone and then my Lifedrive to the same via Bluetooth.  It was slow, but it worked.  Picture doing the same with a full fledged computer over 3G.  Picture doing this with FLASH running in the background (alone 1mb down), spreadsheets (1mb), attachments etc.  So before even starting, you're 2-3 mb in the hole.  (So much for the potential $15 (200mb) plan).   You can see how this could become very cumbersome, usurping at least 200 mb per session.

Rumor 4:  Android devices will need the internet for just about everything.  It stands to reason that when Google comes out with Froyo, everything will be linked to the internet and that will cause more bandwidth to be used.  Consider Google's Documents app.  You will be looking at multiple megabytes of data being downloaded.  My thoughts:  AT&T is shivering thinking about this potential.

Rumor 5:  Tied into Rumor 4, Apple may make MobileMe free!  Now picture Rumor 4 running on Google devices and now multiply that by about 10 for AT&T to include current owners of MobileMe and new owners of MobileMe all vying for bandwidth at the same time - uploading/downloading movies, pictures, music, sound files, applications all over 3G!  If AT&T shivered thinking about Google, there is now panic in the streets at the AT&T headquarters.

So what to do?  Well, if capacity cannot equal demand and you have the ability to lock in the already existing customers, you start to make some big decisions.  Some that could ruin you as a company or save the company going into the future:

• You become proactive and ask customers to report low signal areas.  You then try to fix the problem (this seems to be working in some parts of the country).
• You increase the price to get out of the AT&T contract from $175 to $325.  You claim that the new devices have nothing to do with this change.  Thus you prevent the cavalier purchases and the possibility of never recuperating the money spent to subsidize the phone.
• Although this draws ire from the blogosphere, you know that people will still buy the new iPhone because you are the only one selling it.  And should the sky fall next year as the iPhone migrates to other carriers, you will still collect revenue from the current AT&T subscribers for they will think twice before leaving.
• You support your claim that it is the Power Users who are hogging up the bandwidth.  You get rid of the unlimited plans and kick these vagabonds off the network, hoping that these power users will leave and go to Verizon where you only too happy to see them "clog their pipes."

All of this because AT&T knows that there is a lot more coming down the pike than they are letting on about.  Just the above mentioned possibilities and rumors are enough to require change on their side of the wall.

What is left to ponder is what about the consumer?  Is 2 gigabytes enough to satiate the average iPhone user?  Or more importantly, will 2 gigabytes be enough to satiate the NEW IPHONE USER?  Or will AT&T, and let's be fair, other companies including Verizon, do just enough tweaking of the bandwidth that they stifle innovation and cost developers a lot of money.  If nobody downloads a Pandora, Etrade streaming, Facebook, Twitter or similar apps for fear that it will eat up their bandwidth, the growth of the App store could come to an end.  Let's hope not.


LDD.