AT&T CEO voices regret over iPhone unlimited data model
engadget.com
engadget.com
It's hard to believe this is a real quote by such a senior executive. If the profitability of your business is so significantly based on a hack (SMS) that you stay awake at night worrying about it, and you didn't bother innovating by developing a real solution to the problem (pervasive real-time communication) in the past 20 years while the hack became popular, then you absolutely deserve to lose this profitable part of your business - especially when you're in the friggin telecommunications business!
Real question: Where are they going to recover that profitability from?
They won't. They'll eventually need to adapt to the reality of their business, which is to move data from one point to another. They'll get to decide how to monetize their dumb pipes but their current SMS business model won't last.
If your shifting your model to selling data, wouldn't you want to make it as easy as possible for your customers to consume more data?
I don't get it. If tethering was free, I'd use more of it, and happily pay for it.
They can make a profit from someone who uses 5gb and pays $55 in a month, but I suspect they make more from someone who uses 400mb and pays $25.
As an AT&T iPhone user (grandfathered with the unlimited data plan), I've had nothing but poor service in both Silicon Valley, CA & NYC.
AT&T's CEO regrets offering unlimited data because AT&T has to "invest capital"? As an iPhone user experiencing the lack of capital investment every day, I have no sympathy and only hatred for AT&T.
We can only hope that it'll work out in our favor and they can stop preaching to us how we should use their bandwidth.
I don't get unlimited water for a monthly fee, I get charged per gallon. I'd imagine virtually all people have this situation.
Utilities - water, electricity, gas, etc. - compare to AT&T's new model better than their unlimited one.
The telcos want to be exactly the opposite. They want to control what you do, how you do it, and how much you pay for doing it, not based on the bandwidth used, but the nature of the use. This is the antithesis of a dumb pipe.
This is America. We'll have to catch up to South Korea first.
The crappiest part of The AOL Way that rags like Engadget pioneered ... is that it works better than having people writing actual content.
They're not alone, of course- BBM does the same thing. But they're all disjointed networks, which plays into the provider's hands right now. People still need text plans to contact people on other devices. I wonder if we'll see an app like WhatsApp finally get big enough to challenge that.
I run it on my smartphone and use my Google Voice phone # exclusively. As a result I have been able to get rid of my SMS Verizon plan over a year ago. This is completely transparent to my contacts who have no idea that they are texting/calling a google voice number.
Time moves on and the pipes get commoditized. I hope congress chooses to side with the people rather than mandate profits for the corporations to whom we lease our airwaves.
What causes him to have to invest capital is each additional simultaneous connection which uses his network. These analogize to subscribers to his service, not bits of data sent over his network.
I mean, does he really believe that he can change people's collective usage patterns during peak hours merely by limiting their consumed bandwidth for the whole month? Surely not. If anything, it will persuade people to eliminate their extraneous data usage and only use it when the data connection is "most important". I'm not one for blind guessing, but I have hunch that these "most important" times of data access probably correlate to his current peak hours.
The power companies face this same problem with throughput, and what do they do? Do they cap the amount of power you can receive per month in order to alleviate load? No! They invest in throughput, and when things get sketchy during peak times, they enforce throughput caps like rolling brownouts.
I have a hunch AT&T also does this with their forced data throttling on those who are consuming the most bandwidth, as if they were the problem! But they are also convincing people to pay more for less with monthly data caps. How they can get away with this is very surprising to me, personally.
As customers become more knowledgable about what's going on, and why it makes no sense - AT&T et al will either be required to change their business model or someone will eat their lunch.
I keep hoping the same thing will happen with the major cable companies as well. Die, Comcast, die.
Can imagine him holding back sobs as he considers how he might even have held back the future for 2, 3 more years and squeezed a few more dollars out of 10000% markups on SMS, charging by the kilobyte for data and restricting access to only approved apps/websites. Poor guy, you can tell it's going to haunt him.
You'll have nothing to worry about but finding a new job after your company fail due to competitive pressure.