WSJ: AT&T should charge more for iPhone users
Last week we heard AT&T might be charging less for iPhone usage. Today, the Wall Street Journal is saying that AT&T should charge more for data hungry iPhones. iPhone users use the web much more than any other smartphone's users (except Android?) and according to comScore, web usage is much more data intensive than other network tasks like email or chatting.
The 3.0 version of the software will only increase usage because of the push notifications.
![[Airtime devoted to different data applications versus bandwidth used]](http://s.wsj.net/public/resources/images/MI-AW634_TELHEA_NS_20090510215617.gif)
Users of iPhone download games, video and other Web data at two to four times the rate of other smartphone users, according to comScore. Yet AT&T charges iPhone subscribers the same fee of $30 a month for data that it levies on other smartphone customers. And aside from restricting certain activities, like file sharing, AT&T doesn't limit how much data can be downloaded.
But Web applications popular with iPhone customers are bandwidth hogs. A recent analysis by Alcatel-Lucent of North American wireless network use during the midday hour on one day found Web browsing was consuming 32% of data-related airtime but 69% of bandwidth, while email used 30% of data airtime but only 4% of bandwidth. Email taxes network resources but in a different way.
As the proportion of customers with iPhones grows -- 5.9 million 3G iPhones were activated in the last three quarters, 7.5% of AT&T's total subscribers -- the resulting growth in downloading and Web browsing will strain AT&T's network. AT&T will need to add cell towers and spend more on the back-haul lines that connect the towers to the rest of the network.
Because of this increased cost, the WSJ thinks the carriers should go away from unlimited bandwidth.
In the short term, carriers should abandon unlimited data pricing plans. Both AT&T and Verizon Wireless already charge extra for heavy users with wirelessly connected laptops. They will have to contemplate similar strategies for smartphone users.
Bad idea. One of the best features about the iPhone (and other smartphones for that matter) is that you don't have to count your packets in and out. There is know worry in the back of your mind about what your bill is going to look like. Changing a huge part of the iPhone model could have adverse affects on the whole ecosystem.
We also think their model might be too simplified. First of all, the cost of extra packets to AT&T isn't directly proportional to data plan cost. Once the infrastructure is in, ramping up data throughput is much much cheaper than putting in new towers. Also, the price of the equipment is coming down as well as the cost of bandwidth.
This doesn't mean that AT&T isn't planning something like this, perhaps that is why we are hearing all of this Verizon chatter.
Delicious
Digg
StumbleUpon
Reddit
Facebook
Google
YahooLatest Stories on 9 to 5 Mac
- Wanna know why Apple can't make deals with the TV Networks?
- What does Steve Jobs have bookmarked on his iPad?
- WSJ: Apple has sold "hundreds of thousands of iPads, over a million in first three months"
- Will GoogleTV light a fire under the AppleTV?
- Apple Director Jerome York passes away
- Catchy iPad videos show possibilities of the new platform
- Apple sets up youth programs for Apple Stores
AAPL Stock Coverage
224.65+0
9to5 Toys
Refurbished Targus Tornado 2-Fan Laptop Chill Mat for $5 +$5 s&h
ASUS VW266H 26" Widescreen LCD Display for $280 after rebate + free shipping
Universal Cell Phone Car Charger Kit w/ 9 Connectors for $4 + free shipping
Final Cut Studio 3 for $780 + $14 s&h
Young Micro 4" Flexible Tripod for $3 + free shipping
Poll
Recent comments
- One day we will know the
9 min 3 sec ago - The demos are ok. I like the
28 min 27 sec ago - Look on the bright side, at
40 min 56 sec ago - is it surprising? this site
1 hour 13 min ago - He's not saying "Bigger" he's
1 hour 31 min ago - I guess I'm the only one who
1 hour 33 min ago - According to by sources
1 hour 36 min ago - Apple iPad 2.0: The future
1 hour 37 min ago - That's SMARTER! :-)
1 hour 42 min ago - Talk about "SLIM SHADY"! You
1 hour 43 min ago
Who's online
There are currently 1 user and 7 guests online.
Online users
- tracym1471
Comments (26)
Wow, get a little deeper in AT&T's pocket WSJ. 30$ a month for data is already a terrible deal. If anything, the article should be pointing out the fact that iPhone users are the only people that get their moneys worth for a 30$ plan.
This kind of thinking is dangerous...
Wow. Let's offer the option of using data only over WIFI if you want to start jacking up the prices. That would be how I choose to get my data. 30 dollars down the drain since i never use it outside of a wifi zone.
Wow. Let's offer the option of using data only over WIFI if you want to start jacking up the prices. That would be how I choose to get my data. 30 dollars down the drain since i never use it outside of a wifi zone.
Why doesn't the WBJ mind their own business. iPhone owner or not, I know there is a price tipping point when customers just won't shell out the cash anymore and Apple knows more about this than anyone. When the WBJ speaks I only hear quacks and a ribbit every once-in-a-while.
That's right WSJ, blame the product for the increased use of broadband.
Broadband usage has gone up because Apple produced a product that actually makes using the services like browsing the web more pleasant and more like the user sees on their home computer.
If others out there like MS or Sybian or RIM had produced a product before Apple's attempt at making something people actually wanted to use then it would have been known what Broadband usage would be like and the costs to the carriers. So don't act surprised!
When cars were invented they were not as popular until they had roads to travel on. Now you have LA type traffic and I'm surprised you don't want to place a vehicle use fee because of the increase in cars!
"Now you have LA type traffic and I'm surprised you don't want to place a vehicle use fee because of the increase in cars!"
Actually they are doing that in California and the state government is going to raise it. I guess now we know what all the California state workers read all day.
Since the economy tanked people are learning to become more frugal, if AT&T wants to loose subscribers then by all means raise the prices. One good thing is this would be a catalyst for Apple opening up the iPhone to other carriers.
$30 a month is already very very expensive indeed! here in uk we only pay £5 or so for unlimited web browsing. the only party to be blamed must be at&t for not preparing well for the iphone launch and upgrading their network speed and capacity.
in 3-5 years of time, nearly all traffic will be converted to ip traffic including voice and sms, the company who doesn't invest in the future shall be left alone by the consumers.
Gee guys... can't you read between the lines??
Think. Why was this article written today?
Come on. It's easy. Who does it benefit?
Gee guys... can't you read between the lines??
Think. Why was this article written today?
Come on. It's easy. Who does it benefit?
Why would anyone listen to the WSJ about the internet, these are the guys that are going out of business because they couldn't adapt the business model to the internet.
Gee guys... can't you read between the lines??
Think. Why was this article written today?
Come on. It's easy. Who does it benefit?
The funny thing is AT&T and the other carriers have been ripping people off for years with $30+ data plans for phones that really were not capable of much. The only way to get any usage out of those plans was if you tethered.
So the demand has finally started to catch up to the pricing? Yea I guess it has been tough collecting money for services that were not really used for all these years. Now someone is actually using them and its eating into the business model.
Secondly even if the iPhone is using more bandwidth then the rest of the phones its 7.5% of AT&T's network, that's not a lot.
Why would anyone listen to the WSJ about the internet, these are the guys that are going out of business because they couldn't adapt the business model to the internet.
Why does WSJ mind? Probably because the person who wrote this article owns a load of Verizon stock and they don't want the competion.
Instead of abandoning the flat rates what about increasing the bandwidth in general? The behavior of iPhone customers is not going to change. Actually I'm pretty sure that other smart phone users will start using their devices more when more application become available and people realize that smart phones are more than just business devices. Times change and everyone should adapt including WSJ's thinking. I would be very pissed if I had to pay more taxes because I drive my car more than the average person.
If Apple passed on a percentage of app revenue to the carrier, even a tiny percentage, we wouldn't need to have this discussion.
How does Europe and Asia get away with high bandwidth usage on their wireless networks? They do much more media streaming than the providers here allow. Is our wireless infrastructure that bad? My assumption is yes. For being a "technology leader", we are rather far behind in the development of our wireless networks.
Wireless data transmission is only going to become more popular as smartphone technology continues to develop. Wireless providers really need to invest in a network that will support the demand as usage increases.
I in no way support the idea of charging a particular type of user more than others because of the hardware they use.
I do want to make a comment about the statement made in the post that "the price of equipment is coming down as well as the cost of bandwidth". This (unfortunately) is not true. I work for a company that provides alternative backhaul to wireless carriers and have witnessed first-hand the exponential growth in the backhaul capacity the carriers have been ordering over the past couple of years. Until the installation of fiber to cell sites has made a serious impact on the availability of high capacity pipes - the wireless carriers are stuck paying costly tariff rates to the LEC's in most situations. T-1's to areas outside of the core beltway in most cities scale up quickly to $500, $1000, and sometimes $1500 per T-1. AT&T in many areas has dozens of T-1's installed (at each cell site) to support the explosion of data customers.
Don't get me wrong - I don't sympathize for a second. I beleive they have been bending us over for years with outrageous voice plans and insane early termination handcuffs. I just think we need to be realistic about the cost of doing service. I don't think they should be singling out iPhone users - but I do believe the consumer is finally getting a reasonable deal for what is being provided.
*duck-n-cover*
Mobile computing on over the air networks is absolutely the future. Apple supplied the pioneering device. NOW...AT&T, Verizon will need to get the pioneering network mainly 3G and most importantly 4G LTE right and the bandwidth will not be a problem. I have and iPhone 3G and am not happy about paying $30 (what I also pay for Cable Broadband in my house) to get the crap 3G garbage network coverage AT&T currently has but....I see it as an investment in a future when LTE (Long Term Evolution) takes over and becomes a universal standard. These networks take money to built and money to develop. The days of a voice-plan and data plan are nearing the end. LTE will probably bring more of an emphasis on data and voice-over IP provided by AT&T, Verizon, ect.... Hence...LTE's universal scale will undoubtedly lower the price at that point. Till then a data price increase should only accompany a voice-plan decrease of the same rate.
Mobile computing on over the air networks is absolutely the future. Apple supplied the pioneering device. NOW...AT&T, Verizon will need to get the pioneering network mainly 3G and most importantly 4G LTE right and the bandwidth will not be a problem. I have and iPhone 3G and am not happy about paying $30 (what I also pay for Cable Broadband in my house) to get the crap 3G garbage network coverage AT&T currently has but....I see it as an investment in a future when LTE (Long Term Evolution) takes over and becomes a universal standard. These networks take money to built and money to develop. The days of a voice-plan and data plan are nearing the end. LTE will probably bring more of an emphasis on data and voice-over IP provided by AT&T, Verizon, ect.... Hence...LTE's universal scale will undoubtedly lower the price at that point. Till then a data plan price increase should only accompany a voice-plan price decrease.
Mobile computing on over the air networks is absolutely the future. Apple supplied the pioneering device. NOW...AT&T, Verizon will need to get the pioneering network mainly 3G and most importantly 4G LTE right and the bandwidth will not be a problem. I have and iPhone 3G and am not happy about paying $30 (what I also pay for Cable Broadband in my house) to get the crap 3G garbage network coverage AT&T currently has but....I see it as an investment in a future when LTE (Long Term Evolution) takes over and becomes a universal standard. These networks take money to built and money to develop. The days of a voice-plan and data plan are nearing the end. LTE will probably bring more of an emphasis on data and voice-over IP provided by AT&T, Verizon, ect.... Hence...LTE's universal scale will undoubtedly lower the price at that point.
Mobile computing on over the air networks is absolutely the future. Apple supplied the pioneering device. NOW...AT&T, Verizon will need to get the pioneering network mainly 3G and most importantly 4G LTE right and the bandwidth will not be a problem. I have and iPhone 3G and am not happy about paying $30 (what I also pay for Cable Broadband in my house) to get the crap 3G garbage network coverage AT&T currently has but....I see it as an investment in a future when LTE (Long Term Evolution) takes over and becomes a universal standard. These networks take money to built and money to develop. The days of a voice-plan and data plan are nearing the end. LTE will probably bring more of an emphasis on data and voice-over IP provided by AT&T, Verizon, ect.... Hence...LTE's universal scale will undoubtedly lower the price at that point. Till Then a data price increase sould only accompany at voice-plan decrease of teh same amount!!
Write to Martin Peers at martin.peers@wsj.com
start waking him up and not be so selfish.
If 5.9 million 3g Iphones were activated and all of them were charged the extra 30$ a month equaling 360$ a year from I repeat 5.9 million. . . I'm a noob on this subject, but I think they should be in the black not the red on their books. Very capable to build more towers and not raising the price should in theory cause more people to buy the Iphone 2.