AT&T continues to deny iPhone tiered data pricing plans

Posted:
in iPhone edited January 2014
AT&T continues to fight back against the perception that the company will implement tiered data plans for iPhone users -- a rumor that started after the company's president said "incentives" to discourage heavy bandwidth consumption are likely.



AT&T views expansion of its free Wi-Fi hotspots for customers as a short-term solution for its 3G network issues, which have resulted in dropped calls and spotty reception for some users. Those problems, the company says, are due to iPhone users who consume large amounts of data, well more than the average user.



AT&T Mobility President Ralph de la Vega spoke with BusinessWeek in an attempt to clarify his comments made at an investor event in New York earlier this month. At that event, he was asked about how AT&T would deal with bandwidth-heavy users. De la Vega responded by saying the company has investigated giving incentives to users to "reduce or modify their usage."



De la Vega said he never intended for his words to suggest that data caps or tiered pricing models for iPhone users were imminent. "I guess I should have been more clear," he told BusinessWeek.



It's the second time in a week that he has made a high-profile effort to clarify his comments. Last week, de la Vega spoke with The Wall Street Journal to say AT&T had made no decision to implement tiered pricing.



AT&T's Wi-Fi strategy will utilize the service as a "lifeline" to keep users off of its 3G network and relieve some of the pressure. The nation's second-largest wireless carrier has announced an agreement with fast food chain McDonalds to waive the $2.95 charge for Wi-Fi use at the restaurants for two hours of access. Similar deals have been reached with Starbucks and Barnes & Noble.



Following the introduction of iPhone OS 3.0, AT&T saw 15 million users connect to its Wi-Fi network in one quarter alone this year. The company offers more than 20,000 hotspots.



Also a part in the strategy are "femtocells" that use a home Internet connection and serve as a mini cellular tower. Femtocells can be used to relieve dead spots in coverage in some homes, but the strategy also allows AT&T to have devices connect to a wired Internet connection rather than its 3G network. The 3G MicroCell was tested earlier this year in Charlotte, N.C., and offers 3.2Mbit/sec 3G service to users in their home.



AT&T's network has struggled since the successful launch of the iPhone 3GS, which has brought more bandwidth-heavy devices to its network. The wireless provider has been the subject of much criticism since June. AT&T has noted that 40 percent of AT&T's network capacity is consumed by just 3 percent of smartphone users.



Capital spending at AT&T is expected to decrease this year, from $20.3 billion in 2008 to $17 billion in 2009. Still, de la Vega reportedly said that the company's investments are beginning to pay off. For example, AT&T had fewer dropped calls in San Francisco the week of Dec. 7 than ever before. The company also has plans to further improve its coverage in major metropolitan areas, like San Francisco and New York, where there are more smartphone users.
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Comments

  • Reply 1 of 37
    First.

    YAY!!!
  • Reply 2 of 37
    This will be less of an issue when the iPhone moves to other carriers in the US. Unless those other carriers adopt AT&T's policies (or in this case, potential poliies), in which case there might be a problem. The answer to which would be greater competition driving down prices and making contract more palatable.



    It really depends whether you see carriers as a cartel or not.
  • Reply 3 of 37
    AT&T knows how many people use high data usage.

    Why would they discount most of people not use more than 2 GB per month?

    They are not stupid. They just don't want spend more money to expand.



    But they have to say something for customer who has bad service.

    This is just funny as always big company does not know what they doing.



    They should set up data plan from start as $15 for 2GB/month and $30 for 5GB/month and $50 unlimited.

    And every 1MB over plan limit should be $0.10 = $10 per 1GB.



    So even people start with $15 plan but quickly they will jump to high plan as usage increase.
  • Reply 4 of 37
    AT&T is scared sh*tless of its iPhone customers. Those execs ought to keep their mouths shut unless they have some good news to report.



    Shooting off their mouths is not increasing shareholder value.
  • Reply 5 of 37
    Quote:
    Originally Posted by karas11 View Post


    They should set up data plan from start as $15 for 2GB/month and $30 for 5GB/month and $50 unlimited.



    That sounds like a fair policy as far as rates are concerned. I only use about 500 megs a month.
  • Reply 6 of 37
    Last gasp of a dying company. They have lots of perception problems it seems.



    AT&T has a history of monopoly and self destruction. They are going to loose exclusivity and have to compete on the strength of their service. Lotsa luck.



    Three shopping days left. Come on Apple, where is my 64 gig Verizon iPhone? Wallet is at the ready.
  • Reply 7 of 37
    jeffdmjeffdm Posts: 12,951member
    Quote:
    Originally Posted by Katonah View Post


    First.

    YAY!!!



    Please don't do "first posts".
  • Reply 8 of 37
    Quote:
    Originally Posted by Jerseymac View Post


    Last gasp of a dying company.



    Dying? How do you see the company dying? Yes they are being pounded for poor service in many areas and rightfully so, but dying? Where would the 75 million+ wireless suscribers go? What about their land lines, DSL service, U-Verse and other related services? That would all just disappear overnight? AT&T is not dying.
  • Reply 9 of 37
    So way back on the debut of the iPhone, I swtiched to AT&T. The motivation was soley for the phone. Their service at first was reasonable... But with every successive generation of iPhone's being released, more and more users are being added to the AT&T network. It simply can not handle the load! Even in the best markets...



    Example: Seattle, WA one of their biggest markets where they often role out the newest technology to test and develop. Over the last 2.5 years I have have progressively had more and more DROPPED phone calls. Spotty cellular service has begun to pleg this market as the number of iPhone users increase. Thankfully it is not as bad as San Fransico!!



    I switched to AT&T for the iPhone... NOT the Service!



    On June 28, 2010 the exclusive 3-year AT&T contract with the iPhone will expire and all I can hope is that Apple will bring the iPhone to Verizon! I'd settle for Sprint or even T-Mobile... anything that is better than AT&T.



    Once the iPhone is on multiple carriers, I will again chose a carrier for the service... and not for the phone!



    Good riddens AT&T... you will lose more than 1/2 your user base which will dramatically improve cellular signal and should be looked at as a win-win for your company!
  • Reply 10 of 37
    Quote:
    Originally Posted by JeffDM View Post


    Please don't do "first posts".



    okay.



    I only did it because I see them all the time.



    I'm new here and thought it was a tradition.



    NEVERMIND!
  • Reply 11 of 37
    sdw2001sdw2001 Posts: 18,019member
    AT&T is in meltdown from a PR standpoint right now. I personally find it amusing. When a company's service sucks this much, I take pleasure at watching them flounder. They are going to lose exclusivity on the iPhone, and a boatload of customers to boot.
  • Reply 12 of 37
    Quote:
    Originally Posted by Katonah View Post


    okay.



    I only did it because I see them all the time.



    I'm new here and thought it was a tradition.



    NEVERMIND!



    It's an Internet tradition that never should have been. "First" posts add zero value to the topic discussion.



    This is not Slashdot circa 1999.
  • Reply 13 of 37
    Apple and AT&T should work together to integrate femtocell into Apple's line of Airport devices, drop the prices to be more competitive with other routers and then market the hell out of it.
  • Reply 14 of 37
    Quote:
    Originally Posted by Jerseymac View Post


    Last gasp of a dying company. They have lots of perception problems it seems.



    And you seem to have a problem understanding financial earnings statements it seems.



    Over the past five quarters, AT&T has averaged about $0.51 EPS and pays a dividend of $0.41. A Dow Jones and S&P 500 component, this company is the epitome of slow and steady.
  • Reply 15 of 37
    Quote:
    Originally Posted by karas11 View Post


    AT&T knows how many people use high data usage.

    Why would they discount most of people not use more than 2 GB per month?

    They are not stupid. They just don't want spend more money to expand.



    But they have to say something for customer who has bad service.

    This is just funny as always big company does not know what they doing.



    They should set up data plan from start as $15 for 2GB/month and $30 for 5GB/month and $50 unlimited.

    And every 1MB over plan limit should be $0.10 = $10 per 1GB.



    So even people start with $15 plan but quickly they will jump to high plan as usage increase.



    If Apple was in charge of pricing it would be something drop dead simple...

    Minute plans:

    100 minutes for $9.99

    500 minutes for $29.99

    1000 minutes for $49.99

    2000 minutes for $89.99

    5000 minutes for $149.99



    Data is $9.99 per GB.

    Texting is $0.01 per message.



    Use as much as you want.

    One simple price.
  • Reply 16 of 37
    quinneyquinney Posts: 2,528member
    Quote:
    Originally Posted by Johnny Mozzarella View Post


    Apple and AT&T should work together to integrate femtocell into Apple's line of Airport devices, drop the prices to be more competitive with other routers and then market the hell out of it.



    I like that idea. Maybe, if AT&T is really sucking up to Apple, they will be willing to subsidize the device a few bucks to help lower the cost (and in the process, prevent subscribers from switching to another carrier).
  • Reply 17 of 37
    This whole femtocell thing is retarded. So first I'm supposed to pay AT&T for unlimited service for my iPhone. Then I'm supposed to shell out another few hundred bucks for a femtocell - just to have "reasonably decent" data service. And the femtocell runs on my own bandwidth. Oh wait, and those minutes count against my already purchased minutes.



    Huh?



    They better come up with a better strategy than this. Expecting customers to purchase and support an additional device using their customer-supplied bandwidth - just to solve AT&T's deficiencies is a hopelessly stupid idea. All of this will be obsolete with LTE - so why should I pay $200 or so every few years - isn't the point of 3G that you have an anytime, anywhere connection?



    Here's another idea, AT&T: UPGRADE YOUR INFRASTRUCTURE.
  • Reply 18 of 37
    Quote:
    Originally Posted by cvaldes1831 View Post


    And you seem to have a problem understanding financial earnings statements it seems.



    Over the past five quarters, AT&T has averaged about $0.51 EPS and pays a dividend of $0.41. A Dow Jones and S&P 500 component, this company is the epitome of slow and steady.



    Over the past five quarters they have had an exclusive contract with the iPhone. My speculation is that when the iPhone is opened up to other carriers and they have to compete, they will flounder.



    I don't care how much you AT&T stockholders defend this company, no one in their right mind will pay hundreds of dollars for hardware and eighty plus dollars a month for a phone that can't complete a phone call. It's really that simple to me.



    Never mind all the reasons that AI forum posters have that a Verizon iPhone cannot be done. I am not a stock holder, I am a end user. I am not an expert on the stock market or how cell phones work. I am a "mere mortal," the kind of person the Mac and the iPhone is supposed to be designed for. I want things that "just work."



    I love everything about the iPhone except it's inability to complete a phone call. And don't give me any crapola that the iPhone chip doesn't switch between cell towers or that the network is overloaded by bandwidth hoggers. AT&T has had a tradition of dropping calls for a decade before the iPhone was ever around. I only gave them another chance with the iPhone because of their coverage map which is a total lie. Once my contract is up, I am OUT. If Apple wants me back, make a Verizon iPhone.



    Happy Holidays to you all.
  • Reply 19 of 37
    Quote:
    Originally Posted by SDW2001 View Post


    AT&T is in meltdown from a PR standpoint right now. I personally find it amusing. When a company's service sucks this much, I take pleasure at watching them flounder. They are going to lose exclusivity on the iPhone, and a boatload of customers to boot.



    I don't doubt that there are many users in NY and SF who are upset. I just don' think, as a whole, that there are that many. Operation Chokehold last week had a few thousand participants? The network was not even impacted. A few thousand customers out of 80 million is nothing. Heck, any company that can achieve a satisfaction rate that high is the envy of capitalism.



    I do want choice...and it will happen once Apple decides to accept a lower subsidy from multiple carriers (as opposed to a high subsidy from 1 carrier). However, what choice do we have here in the US?



    Verizon?....control freaks who nickel and dime every service.....who can not support concurrent voice and data....whose antiquated CDMA network can not peak above 1.4Mb? No way....not for me.



    T-Mobile?....their 3G foot print is even smaller than AT&Ts. At least they can support the Global 3G standard.



    Sprint?....they are heading in the wrong direction with their 3G standards....isolated from the rest of the world...no wonder they are bleeding customers each month.
  • Reply 20 of 37
    Quote:
    Originally Posted by Johnny Mozzarella View Post


    Apple and AT&T should work together to integrate femtocell into Apple's line of Airport devices, drop the prices to be more competitive with other routers and then market the hell out of it.



    An Airport base station with an integrated femtocell would solve a lot of problems. Apple probably would want to include all GSM frequencies though. ATT should pay customers to use it, but I would be happy if they just didn't charge extra. ISPs may complain that they want some of the money ATT collects.
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