Wednesday, June 2, 2010

AT&T Gives The Future The Finger, Announces New iPhone Data Pricing Plans

AT&T has announced their new pricing structure for data on iPhone well in advance of the 4G release and OS 4.0.

The gist of the program? You'll probably be spending a lot more time worrying about something that should have been included from the start.

You must be thinking to yourself, "No way! I'm not a heavy data user. I won't be going over 200MB a month so I'll be saving in the end." That may be true. Before you write me off sign in to your account and review your data usage for the last 5 months.

Here's mine:
No, that isn't an error. In December I activated tethering, the much anticipated but never delivered feature that allows an iPhone user to turn their device into a modem, allowing laptops or other USB and Bluetooth compatible devices to access the internet through the iPhone's 3G signal.

I travel 20-30% of the time, and tethering was a perfect solution to the endless search for a high speed connection. Too bad that my usage will cost me an extra $75 per month, bringing my already ludicrous monthly AT&T bill to $200.

Steve Jobs recently addressed network concerns (not data plans). Clearly Apple is in the same camp. AT&T wasn't ready from a network perspective, and you can bet that despite Jobs' calm demeanor he is fuming about the lack of progress from AT&T's end.

Some choice quotes from Jobs:

"I know little about this stuff [wireless networks] technically. This is not my area of expertise. To make things better people reallocate spectrum."

"Things in general, before they start to fix them, get worse before they get better. That's what I am told."

"A lot of things are going to get better by the end of Summer."

My opinion on the entire matter is that AT&T has failed in two regards. From a network perspective they failed to anticipate the level of data and call volume that an exclusive contract with Apple would generate. It's clear their network can't handle it, and their solution is to build disincentives in for heavy 3G data usage.

From a customer relations perspective AT&T has failed to admit their blunder. Just come out and say, "Hey guys - we messed up! We thought we had a network that could handle such heavy use, but it wasn't the case. We are fixing it, and here's when you can expect that fix. In the mean time we aren't going to punish you for using your device as intended, just realize that service may not be that great in certain areas and during certain times."

This is to say nothing for the near future. As Apple continues to roll out new products and services (iAd and iPhone 4G with video conferencing anyone?) the norm for data usage will shift.

If you made it this far I'll just deliver my point: AT&T may be creating a business model that goes against the grain. As cloud computing, streaming video and audio, VOIP, video conferencing, MMS, and other technologies become mainstream 200MB a day won't be enough. Apple has little patience for companies that impede their progress, so I have to wonder if AT&T isn't shooting itself in the foot. What do you think?

Nick Kinports (follow him on Twitter @ADMAVEN) has worked in the interactive technology world for over 9 years, and helps the Fortune 100 identify unmet consumer needs, create ideas to fill those needs, and bring them into market. He currently works at Maddock Douglas.
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