Update: AT&T Says Metered Cell Phone Data Plans Are Inevitable
March 3, 2010 4:30 PM
AT&T's CEO said that his company isn't about to let the iPhone get away, despite network performance gripes from customers.
(Source: The Huffington Post)
AT&T risks falling behind yet again in the cell phone technology race
Metered internet pricing is a controversial suggestion, both in wireless and wired form. Basically, most iterations of the plan boil down to low-usage users' costs remaining similar to current costs, but high usage users having to pay much more than their current rates. Customers by and large hate the idea since they feel they already pay too much for their internet (major service providers in the U.S., like Comcast and Embarq, have
fought to outlaw municipal Wi-Fi services
that would offer cheaper internet to citizens). Internet service providers, though, oft seem to see dollar signs when they dream of metered pricing.
In the U.S. a handful of companies have conducted wired or wireless meter pricing trials --
are two of the biggest. Time Warner
dropped its plans
after backlash, but AT&T is lending serious consideration to plans to increase the fees of its busier users. AT&T Inc. Chief Executive Randall Stephenson on Tuesday said that he feels an eventual rollout of a metered wireless billing plan is an inevitability for his company.
In a multi-topic presentation at a Morgan Stanley conference in San Francisco Mr. Stephenson stated, "
For the industry we will progressively move towards more what I will call variable pricing, if you will. The heavy consumers will pay different than the lower consumers.
The announcement leaves customers with a somewhat mixed signal, considering AT&T's recent indication that it was
turning away from considering tiered pricing
and instead stepping up Wi-Fi partnerships. His consideration of metered pricing is not unique, though -- Verizon Wireless, America's largest carrier, recently indicated that it was eyeing trial deployments of tiered pricing as well.
Among the other interesting topics Mr. Stephenson hit on was the company's relationship with Apple. Despite some gripes from iPhone owners, Mr. Stephenson is convinced that iPhone will be a "key product" (hinting at exclusivity) for "quite some time".
He also remarked upon the company's plans for Apple's long-awaited
. He stated, "
When you think of the iPad and how that correlates with pricing, the iPad -- it is going to be interesting to see the customer reaction to the iPad. Our expectation is that it is -- there's not going to be a lot of people out there looking for one more subscription revenue stream to put on our network, as a result of an iPad. We think it is going to be a largely Wi-Fi driven product. And that is why you see the pricing of the model to be one that is prepaid in nature.
AT&T will sell iPad usage plans on a monthly basis (no-contract). The carrier will offer $15 and $30 one-month service plans, depending on the level of usage.
Mr. Stephenson and other AT&T executives said that the company is
working to correct
the highly publicized
shortcomings of their network in New York City
and San Francisco. They are beefing up infrastructure in these regions that were swamped by the growing legion of iPhones.
There's some concern on the advanced technologies front that AT&T may be letting itself slip behind in infrastructure, though.
have both announced ambitious plans to deploy faster 4G networks, but AT&T won't begin substantial deployments until 2011. It says that deployment won't "accelerate" until 2012. AT&T is currently deploying HSPA 7.2 a "3.5G" technology.
AT&T slashed its infrastructure investment in 2009, but this year plans to
invest $2B USD more
to prepare for the iPad and iPhone demand.
Update 1: 3/3/2010 4:19 p.m.--
An AT&T spokesperson contacted us with some more details about the presentation. Among the points he raised was that T-Mobile had
announced plans to trial
4G in 2010. While it may still do so, it currently has only announced the
mass deployment of HSPA+
, a more advanced version of HSPA 7.2 (but still 3.5G). The spokeperson also notes that T-Mobile upgrade is merely a software update, not a new infrastructure installation like LTE
AT&T's spokersperson says that while AT&T is "about a year behind" Verizon and Sprint in terms of 4G deployment, the company feels that its technology will hit the market at about the same times as smart phones that can take full advantage of the tech hit the market (in 2011). AT&T's best selling smart phones, the Blackberries and the iPhone, are only equipped with 3G tech. A 4G iPhone could be coming this summer, but it seems more likely that the iPhone will get a 4G refresh in 2012.
AT&T's argument is that it provides customers with the best data network on the market, currently. Recent performance tests, such as one at
and one at
do seem to confirm that. Of course that doesn't speak to call quality, signal strength, or dropped call rates (that's the voice network), but AT&T tells us its improving in those areas as well.
The spokeperson also notes that there's no concrete plan in place for a tiered pricing scheme, but that the management at AT&T does view it as an inevitability for the entire industry, as this article indicates.
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