AT&T says tiered data pricing inevitable, not rushing towards 4G
Apple's exclusive iPhone carrier AT&T Wireless said the industry will likely eventually charge bandwidth-heavy users more for their data plans than those customers who use networks more sparingly, but added that the company in no rush to roll out its next-generation technology [updated with clarified comments from AT&T].
The comments came as part of a broad presentation by AT&T Chief Executive Randall Stephenson to investors attending a Morgan Stanley conference in San Francisco on Tuesday, in which he stated his belief that most early adopters of Apple's soon-to-ship iPad device will largely rely on WiFi instead of purchasing a(nother) 3G wireless plan.
It's going to be "interesting to see the customer reaction to the iPad," he said, answering investors' concerns that yet another popular Apple device could further strain its 3G network in congested major metropolitan cities like New York. "We think it's going to be a largely WiFi-driven product."
Stephenson reemphasized his firm's commitment to continue strengthening its 3G network by pouring millions into backend technology in regions where customers have experienced the most problems. He added, however, that another safeguard against over-saturation could see the carrier eventually adopt a new metered pricing model that will charge its bandwidth-guzzling customers more than those who make more modest use of its network.
Update: AT&T spokesman James Carracher contacted AppleInsider Tuesday evening to clarify Stephenson's comments, which were meant to portray where the CEO thinks the wireless industry as a whole is headed.. His exact quote on the issue of tiered pricing was as follows:
"For the industry, we will progressively move towards more of what I call variable pricing. The heavy consumers will pay different than the lower consumers.”
The remarks could rekindle speculation that tiered iPhone 3G data plans may be on the horizon. Rumors to that end first surfaced in an research report from Kaufman Bros last February but only gained widespread attention when AT&T consumer services chief Ralph de la Vega later seconded the notion during a UBS investment conference in December.
More specifically, he cited statistics as revealing that 40 percent of AT&T's network capacity is used by just 3 percent of smartphone users, adding that it's inevitable that those high-bandwidth users will be charged for what they use. Following public outcry over the matter, AT&T spent the next week attempting to cool rumors of tiered iPhone data pricing, with de la Vega clarify his comments to suggest the carrier would instead begin offering incentives to users to "reduce or modify their usage."
In other revelations Tuesday, Stephenson confirmed that the iPhone will remain a staple of AT&T's business for "quite some time," but stopped short ruling out the possibility that rival carriers could also begin carrying the device stateside. He also said AT&T is in no hurry to push out its 4G network, which is based on technology referred to as LTE or Long Term Evolution.
Although its LTE network will greatly broaden its wireless pipelines and provide customers with much faster download and upload speeds, the carrier reportedly believes its existing 3G network is 'sufficient to handle data traffic for the next few years.'
"We're not in a tremendous hurry on LTE," he said. Instead, the carrier doesn't plan to begin rolling out the next-gen technology until 2011, before taking it mainstream in 2012.
The comments came as part of a broad presentation by AT&T Chief Executive Randall Stephenson to investors attending a Morgan Stanley conference in San Francisco on Tuesday, in which he stated his belief that most early adopters of Apple's soon-to-ship iPad device will largely rely on WiFi instead of purchasing a(nother) 3G wireless plan.
It's going to be "interesting to see the customer reaction to the iPad," he said, answering investors' concerns that yet another popular Apple device could further strain its 3G network in congested major metropolitan cities like New York. "We think it's going to be a largely WiFi-driven product."
Stephenson reemphasized his firm's commitment to continue strengthening its 3G network by pouring millions into backend technology in regions where customers have experienced the most problems. He added, however, that another safeguard against over-saturation could see the carrier eventually adopt a new metered pricing model that will charge its bandwidth-guzzling customers more than those who make more modest use of its network.
Update: AT&T spokesman James Carracher contacted AppleInsider Tuesday evening to clarify Stephenson's comments, which were meant to portray where the CEO thinks the wireless industry as a whole is headed.. His exact quote on the issue of tiered pricing was as follows:
"For the industry, we will progressively move towards more of what I call variable pricing. The heavy consumers will pay different than the lower consumers.”
The remarks could rekindle speculation that tiered iPhone 3G data plans may be on the horizon. Rumors to that end first surfaced in an research report from Kaufman Bros last February but only gained widespread attention when AT&T consumer services chief Ralph de la Vega later seconded the notion during a UBS investment conference in December.
More specifically, he cited statistics as revealing that 40 percent of AT&T's network capacity is used by just 3 percent of smartphone users, adding that it's inevitable that those high-bandwidth users will be charged for what they use. Following public outcry over the matter, AT&T spent the next week attempting to cool rumors of tiered iPhone data pricing, with de la Vega clarify his comments to suggest the carrier would instead begin offering incentives to users to "reduce or modify their usage."
In other revelations Tuesday, Stephenson confirmed that the iPhone will remain a staple of AT&T's business for "quite some time," but stopped short ruling out the possibility that rival carriers could also begin carrying the device stateside. He also said AT&T is in no hurry to push out its 4G network, which is based on technology referred to as LTE or Long Term Evolution.
Although its LTE network will greatly broaden its wireless pipelines and provide customers with much faster download and upload speeds, the carrier reportedly believes its existing 3G network is 'sufficient to handle data traffic for the next few years.'
"We're not in a tremendous hurry on LTE," he said. Instead, the carrier doesn't plan to begin rolling out the next-gen technology until 2011, before taking it mainstream in 2012.
Comments
All i have to say is, ATT should have seen it coming when it agreed to an "Unlimited" data plan. As long as they don't raise existing rates on iPHone users (i'm a 3G 1st Gen'er), i don't care. But as usual they keep adding to the phone to make it desirable. I'm waiting until this phone dies before i buy another one. So "F-U" ATT...
Phone bandwidth is a limited resource and must be managed properly. As usual, the 1% ruins it for the other 99%.
I would have a problem if after implementation of this my phone plan does not go down.
It will be interesting to see what happens after if this plan is enacted. Perhaps the network reliability will increase due to the lower saturation on certain towers?
Would be nice to tether an iPad to it seeing how I already have 3G on the phone already on my person - why do I need ANOTHER 3G device?
Plus sorry aesthetically - the chopped up 3g iPad's don't interest me. The unblemished WiFi-only iPad does.
More specifically, he cited statistics as revealing that 40 percent of AT&T's network capacity is used by just 3 percent of smartphone users, adding that it's inevitable that those high-bandwidth users will be charged for what they use.
"We're not in a tremendous hurry on LTE," he said. Instead, the carrier doesn't plan to begin rolling out the next-gen technology until 2011, before taking it mainstream in 2012.
[ View this article at AppleInsider.com ]
Ok, so in a few years it will be 40% of the users using 300% of the bandwith. What is he gonna do then? I mean what today only a few percent use, very shortly everyone will use as the market share of smartphones grows so will the demands on the network. ATT should be rushing full speed ahead towards 4G, if they don't they will really lag behind everyone else.
This is why US sucks b@lls when it comes to cellular data, and internet speeds in general compared to europe and asia. Hurts to know that there are idiots in charge of the business who have no idea what is already happening abroad and how far they are behind.
AT&T plans on milking people who are big users of the lackluster 3G data technology AND are going to drag its feet on implementing the faster/better 4G technology!!
Now the AT&T marketing group has to come up with a snappy TV AD to sell this wonderful business strategy!
Ok, so in a few years it will be 40% of the users using 300% of the bandwith. What is he gonna do then? I mean what today only a few percent use, very shortly everyone will use as the market share of smartphones grows so will the demands on the network. ATT should be rushing full speed ahead towards 4G, if they don't they will really lag behind everyone else.
This is why US sucks b@lls when it comes to cellular data, and internet speeds in general compared to europe and asia. Hurts to know that there are idiots in charge of the business who have no idea what is already happening abroad and how far they are behind.
You really have no idea what you are talking about.
Just look at the wired.com 3G iphone survey --- AT&T got the third fastest iphone speed in the whole world.
Europe only beats the US in the "advertised" speed department --- not actual speed.
Samething for broadband --- US is 4 years ahead of Europe in FTTH deployments.
*This only works well if everyone has the same air interface so that there is competition.
Phone bandwidth is a limited resource and must be managed properly. As usual, the 1% ruins it for the other 99%.
Okay but your numbers are flat out wrong...
..he cited statistics as revealing that 40 percent of AT&T's network capacity is used by just 3 percent of smartphone users...
So first you have to determine the percent of AT&T network capacity used by dumb phones something that isn't disclosed... then you have to factor in that prior to the iPhone, 90%+ of the smart phones went GREATLY unused due to cell phone developers being incompetent and unable to build a product that is useable by 'everyone' and not just the techno-geeks. Then you have the fly in the ointment (aka the iPhone) that enabled everyone to finally utilize the technologies that everyone else failed to develop, whoosh data usage soars.
Now my questions are this:
How many 'dumb' phones are on AT&Ts network?
What % of the network traffic do they consume?
How many (non-iPhone) smartphones are on AT&Ts network?
What % of the network traffic do they consume?
Finally how many iPhones are on the AT&T network and what % of the network traffic do they consume?
I'm going to go out on a limb and say that a GREAT NUMBER of iPhone users are being shoved into that '3% abusers' group.
What I find most telling is they don't give any indication on what IS an acceptable use of bandwidth.
Finally this quote:
Although its LTE network will greatly broaden its wireless pipelines and provide customers with much faster download and upload speeds, the carrier reportedly believes its existing 3G network is 'sufficient to handle data traffic for the next few years.'
But wait... didn't they just get done saying that 3% of the smartphone users were resposible for consuming 40% of the AT&T 3G bandwidth? If so then how could they turn around and proclaim 3G is ''sufficient to handle data traffic for the next few years" unless they really mean "sufficient once we jack up the costs high enough to make people not use it".
I think it would be more responsible if AT&T would admit that not only they didn't sell us an "unlimited" data plan, but also never intended for us to use it, but happily keep on paying for it. I know this analogy isn't quite correct, but it's like if DirectTV or Dish Network complained that its customers were watching too much TV. Or better yet, maybe AT&T should complain that people use too many of their allotted monthly minutes (talking on their phones) and charge people a premium for using 90% of their monthly minutes.
I guess I just don't get it.
They've been promising that as "coming soon" on their website for - um - ever.
Well to be fair they haven't promised it (and not delivered) nearly as long as Verizon customers were flat-out denied bluetooth... Hmmm I have to assume after this long Verizon finally caved on that right?!?!
So by the time 4G is the norm, they'll have network coverage issues again. Way to stay behind.
Especially since most of the network will probably still be 2G.