AT&T Wireless CEO Ralph de la Vega raised eyebrows during a speech to industry professionals in Las Vegas yesterday. De la Vega was quick to point out that 40% of all smartphone data is used by just 3% of the company’s smartphone users. While he didn’t go into specifics, it’s safe to say that 3% is made up of iPhone users, and those users have not been shy about voice their displeasure about AT&T’s foot dragging where MMS was concerned (it was finally rolled out last month), lack of VoIP services, and their general unhappiness with the network in general.
De la Vega went on to make a statement that many iPhone users found ominous:
“We have to manage the network to make sure that the few cannot crowd out the many,” De la Vega continued. He said the words “crowded out” at least five times in that part of his keynote address.
What exactly he means by managing the network is not yet clear but it certainly sounds like price increases on data plans, data caps or throttling could be in store for the future. While such moves may certainly ease the burden placed on the network, it will most certainly anger iPhone users, many of who are already unhappy. If a cap or throttling is put in place and Verizon or another carrier is successful in getting the iPhone, AT&T could see a huge loss in customers, even though it could mean having to buy a new iPhone if it ends up on one of the CDMA carriers.
Data managing has not gone over well in the past. Comcast found itself in hot water after it began quietly throttling the bandwidth of users who regularly used bittorrent or streaming video services. Time Warner introduced data caps and tiered data plans in some cities as a test, and it has not done well. While it’s clear that the iPhone is a data hog and as such is placing a huge strain on the network, a solution that would solve the problem without angering users will be hard to come by.
Read [PCWorld]
Just what are you babbling about? The other two of the top three carriers—Sprint/Nextel and Verizon Wireless—ALREADY cap and throttle data. Have you not been paying attention? Not read the actual contract language? Don't remember Verizon users, for example, being terminated for exceeding data limits? And, certainly there are effectively data caps already in place on at&t users other than iPhone data plan subscribers. Again: read the subscriber contract language.
Among the four major carries, only GSM carrier T-Mobile USA has allowed unlimited data access via devices attached to its network, and indications are that for most users, this practice is ending or will soon be limited.
And, you won't be seeing a CDMA iPhone. Ever. While it is technologically feasible, it just is not going to happen. So, saying that there will be a vast migration of iPhone users away from at&t if the cost of data plans increase is simply silly. People will either pay the increased fees for larger blocks of meter data use, pay per-minute metered time penalties if they exceed new allowances, use WiFi predominantly to overcome carrier limitations, or give up their iPhones. It's really that simple…
I am an iPhone user since Dec 2008. While I love the device, AT&T's network leaves a lot to be desired here in NYC. Both voice and data are sub-par on quality and reliability.
The AT&T network already has a throttle in place. My speeds average 400kbps, sometimes as low as 200kbps. Many apps can't be used on 3g, and will only work on WIFI, and so VOIP is not allowed. My neighbor has a data card on his laptop serviced by Verizon, and consistently clocks better than 900kbps.
One thing is for sure, if the unlimited data part of my contract is abrogated, or if further "throttling" takes place, I will not feel obligated to pay the ETF, and WILL switch carriers.
Tamara
AT&T wanted the iPhone. AT&T wanted exclusivity. Now they have to pay the price. Idiots!
Don't cap something that you wanted so badly. What comes as good always comes with bad. It's not our fault, it's AT&T's fault. If T-Mobile were allowed to offer iPhone on a contract, they wouldn't have this problem.
Verizon only caps DATA CARDS & TETHERING usage. Blackberries and other smart phones do not have caps on their data plans.
Michael clearly works for or with ATT. The lies must stop Michael. Yes they do pay people to comment and do damage control on articles like these.
This article is just dumb and the first response was on the right track, but comments were harsh.
For all the carriers, you have to look in the fine print. Plans are unlimited, and they don't necessarily list an actual cap, but the wording is such that they ensure that you use data in a 'reasonable' manner, and they state you can't stream movies, songs etc .. you can use the data within reason.
But all that aside, people seem to think that all carriers are "evil" when they set caps and limits, without failing to realize the mass amounts of money these companies have invested in over the years, on the network. They have to make back their money invested! It's a simple calculation called Return On Invested Capital, and as nice and warm and fuzzy as it would be for the internet to be free or really cheap, that's not how its going to work…. at least not for now. AT&T, Verizon etc must find ways to make back all the money they have spent on the spectrum and the infrastructure put in place so that you guys can download movies 24/7
here is a snippet from Verizon for their "unlimited" data plans for smartphones.. as you can see, there are certain rules you must abide by.. basically unlimited really just refers to "web browsing" and "checking email" all the time.. once youo move into the territory of st reaming things and actually downloading mass amounts of data, this IS A BIG NO NO
Unlimited PDA/Smartphone and BlackBerry® Plans:
Data sessions may be used for following purposes: (i) Internet browsing; (ii) email; and (iii) intranet access (including access to corporate intranets, email and individual productivity applications like customer relationship management, sales force and field service automation. Intranet access requires the BlackBerry Enterprise Server.). Unlimited plans are for individual use only and not for resale. The Unlimited plans cannot be used: (1) for any applications that tether the device to laptops, PCs, or other equipment for any purpose, (2) for uploading, downloading or streaming of movies, music or games, (3) with server devices or with host computer applications other than the BlackBerry Enterprise Server, including, without limitation, Web camera posts or broadcasts, continuous jpeg file transfers, automatic data feeds, telemetry applications, automated functions or any other machine-to-machine applications, (4) as substitute or backup for private lines or dedicated data connections.
Data sessions automatically terminate after two hours of inactivity unless used with a Mobile IP-capable device. We reserve the right to deny or terminate service, without notice, to anyone who uses the Unlimited plan in any manner prohibited above or whose usage adversely impacts our network or service levels. We also reserve the right to terminate service upon expiration of Customer Agreement term.
I apologize for what others interpreted as rude. I stand by what I said however, as it is factually correct. Though I have never worked for a carrier, I am a long time close observer of the US wireless industry.
It is disingenuous to claim that a service is 'unlimited' when the contract language clearly indicates that limits exist, whether explicitly spelled out or not. All major US carriers but T-Mobile have substantial limits on one or more or their data offerings, and recent moves by T-Mobile suggest that they are effectively moving in that direction. They recently dropped long-standing unlimited tethering support for all but Blackberry and Windows Mobile devices, and did so very quietly. Very quietly. Connections are still possible with other devices, but no longer explicitly supported.
I am not arguing wether or not such limitations should exist: I am simply stating that they do, and consumers—who, by and large have never read the contracts they signed—are unaware of the rules that they have agreed to abide by, and the responsibilities of the carriers.
Satisfaction with wireless service is a very personal thing, influenced by such amorphous measures as coverage, device selection, how many others in a community use the same service, user habits such as the propensity to tether or send multimedia files, and so on. In my experience, the greatest value to the widest number of users—flattening the personal biases of largely uninformed subscribers—is as follows, from highest value overall to lowest:
T-Mobile
Sprint/Nextel
at&t
Verizon Wireless
I am absolutely confident that Verizon subscribers would disagree, but years of looking at important measures have convinced me that this is the case. It is, ironically, almost the inverse of carrier penetration, with Verizon and at&t periodically trading the largest subscriber bases, and Sprint/Nextel and T-Mobile at the low end among the four major carriers.
There is absolutely no evidence that Verizon is 'in talks with Apple' or engaged in any other effort to bring the iPhone to its network. The business model which Verizon promulgates is completely at odds with that of Apple, and they are clearly a 'bad fit' as partners. That doesn't mean that Verizon is a bad carrier or does not provide value as measured by its subscribers, but is clear that they won't partner in the foreseeable future, as to do so would require Verizon making wholesale changes as a carrier, something that makes little sense in light of its traditional revenue streams and historic behaviors.
Certainly the transition to 4G networks such as Long-Term Evolution and WiMAX have an impact on such considerations, but widespread deployment across current carrier footprints is a year away in terms of WiMAX, and two in terms of LTE. This, despite announcements and ongoing trials. Verizon and at&t are committed to LTE, while Sprint/Nextel and T-Mobile are going forward with WiMAX.
And, there are no absolutes in this industry: only defensible generalizations. Everything is complicated and convoluted, from network coverage to customer satisfaction. And, almost all subscribers personalize their experience and expectations, and broadly apply their beliefs to the industry. Very few actually look at the industry itself, and at its technological and operating issues, or at what drives carrier behavior.
Will,
Your first statement is absolutely correct. AT&T wanted the iPhone and should have forseen these issues. How AT&T wasn't ready for MMS and teathering, or the mass amounts of data traffic with the iPhone is beyond me.
However, I do believe that even if they had the forsight to see the problem coming, it would be impossible to build out the network fast enough to stay in front of it, at least in the beginning.
Your second statement that says that T-Mobile would suffer the same problems as AT&T are, IMHO, completely wrong. I believe that when the iPhone is available on other carriers, customers will encounter many of the same problems.
With the language from Ralph and the announcment that AT&T will allow VOIP, my guess is that the contract is going to become much more specific about caps. That will be the only way to make up for the lost revenue on voice calls (ie. customers reduce voice plans to the minimum and use VOIP instead) and deal with the additional data on the network.
Brian,
Sorry I meant that AT&T wouldn't have as many problems if it weren't exclusive. This way iPhones would be a little more spread out between two networks. There will be problems with AT&T still, but not as bad as they would be because of AT&T exclusivity.
Sue, is it that time of the month again?
ATT had a lot of problem until now at least this is what my friend told me.
First of al Michael, your rude attitude is not welcome or necessary. Please tone it down.
Second, Sprint's unlimited data plans are indeed unlimited. I don't have Verizon but as far as I know their's are as well. The only caps are on DATA CARDS. Data cards and USB broadband modems have a 5GB cap. There is no cap on data accessed via phones, and no throttling.
Finally, since Verizon is in negotations with Apple it is possible we may eventually see a CDMA iPhone. AT&T will not have their stranglehold on the device forever.
Thank you for sharing your thoughts, but next time don't be so rude about it.