cNet
AT&T wants its iPhone users to use less wireless data, and it plans to introduce new pricing models to curb users' data usage as it tries to keep up with growing demand.
At an investor conference in New York on Wednesday, Ralph de la Vega, AT&T's head of wireless, announced that the wireless operator plans to introduce new pricing for heavy wireless-data users.
AT&T has been struggling to keep up with demand for wireless-data usage on its network. The iPhone, launched more than two years ago, has revolutionized mobile Web usage. The device, which was built more for accessing the Net than making calls, can access more than 100,000 applications, many of which use the mobile Internet.
iPhone users on average consume five to seven times more data per month than average wireless subscribers, according to analyst firm Sanford Bernstein. And all this usage is clogging the network, causing many iPhone users, especially in large cities such as New York and San Francisco, to experience dropped calls, slow 3G service, and issues connecting to the network at all.
AT&T has been reluctant to admit that there is a problem, but recently, the company has acknowledged that problems exist. According to The Wall Street Journal, de la Vega admitted that New York and San Francisco have been experiencing service issues. And the company recently launched an iPhone application that allows users to report service problems.
AT&T has been upgrading its network to the next generation of 3G wireless service to increase network capacity. But now the company is saying it needs to actually curb usage in order to get a handle on demand.
De la Vega said 3 percent of smartphone users are consuming 40 percent of the network capacity, with most of the high-bandwdith actvity coming from streaming-video and audio applications. Several applications on the iPhone provide nonstop Internet radio.
Unlike voice service, which is already tiered, wireless-data service is charged at an all-you-can-eat flat rate. iPhone users select a voice plan, then pay an extra $30 a month for unlimited data usage. By contrast, AT&T has limited the amount of data that its wireless-data card users can consume each month to 5GB. After that limit has been reached, customers who use the AT&T network to access the Net from their laptops get charged more based on their usage.
De la Vega didn't provide specifics of when or how a new pricing model would be instituted. But the hope is that it will help slow down the growth of data usage.
But asking iPhone users and other smartphone subscribers to cut back on their data usage may be somewhat unrealistic, and it could actually stifle innovation and development of the mobile Internet.
AT&T seems to realize that this is not a long-term solution. And not only is the carrier upgrading its network, but it's also asking the Federal Communications Commission to find more spectrum to auction off that can be used for wireless-data services. Jim Cicconi, senior executive vice president of external and legislative affairs for AT&T, said in a separate interview with CNET on Wednesday that something needs to be done to deal with the flood of wireless internet service data.
Cicconi and AT&T's CEO Randall Stephenson met with FCC staff members earlier this week to discuss the spectrum issue.
"Clearly, there is a looming crisis that needs to be addressed when it comes to spectrum availability," Cicconi said in an interview at his office in Washington, D.C. "Wireless-data usage is growing far faster than anyone had expected. And if we don't do something soon, we will run out very fast. And then we will have to start telling wireless customers that they can't do all the things they want to do with their devices."
FCC Chairman Julius Genachowski has made freeing up more spectrum a top priority. And he has already proposed that the FCC look into taking some spectrum away from TV broadcasters to give to wireless operators to deliver more wireless-broadband services.
Naturally, the TV broadcasters oppose such a proposal.
For now, it looks as if AT&T will try to slow the growth with hefty prices. It will be interesting to see if its competitors follow suit. Verizon has already amended wireless-data pricing for its low-end phones in an effort to squeeze out more revenue from users. But drastic changes in data pricing could scare off some customers and curb smartphone adoption altogether.
At an investor conference in New York on Wednesday, Ralph de la Vega, AT&T's head of wireless, announced that the wireless operator plans to introduce new pricing for heavy wireless-data users.
AT&T has been struggling to keep up with demand for wireless-data usage on its network. The iPhone, launched more than two years ago, has revolutionized mobile Web usage. The device, which was built more for accessing the Net than making calls, can access more than 100,000 applications, many of which use the mobile Internet.
iPhone users on average consume five to seven times more data per month than average wireless subscribers, according to analyst firm Sanford Bernstein. And all this usage is clogging the network, causing many iPhone users, especially in large cities such as New York and San Francisco, to experience dropped calls, slow 3G service, and issues connecting to the network at all.
AT&T has been reluctant to admit that there is a problem, but recently, the company has acknowledged that problems exist. According to The Wall Street Journal, de la Vega admitted that New York and San Francisco have been experiencing service issues. And the company recently launched an iPhone application that allows users to report service problems.
AT&T has been upgrading its network to the next generation of 3G wireless service to increase network capacity. But now the company is saying it needs to actually curb usage in order to get a handle on demand.
De la Vega said 3 percent of smartphone users are consuming 40 percent of the network capacity, with most of the high-bandwdith actvity coming from streaming-video and audio applications. Several applications on the iPhone provide nonstop Internet radio.
Unlike voice service, which is already tiered, wireless-data service is charged at an all-you-can-eat flat rate. iPhone users select a voice plan, then pay an extra $30 a month for unlimited data usage. By contrast, AT&T has limited the amount of data that its wireless-data card users can consume each month to 5GB. After that limit has been reached, customers who use the AT&T network to access the Net from their laptops get charged more based on their usage.
De la Vega didn't provide specifics of when or how a new pricing model would be instituted. But the hope is that it will help slow down the growth of data usage.
But asking iPhone users and other smartphone subscribers to cut back on their data usage may be somewhat unrealistic, and it could actually stifle innovation and development of the mobile Internet.
AT&T seems to realize that this is not a long-term solution. And not only is the carrier upgrading its network, but it's also asking the Federal Communications Commission to find more spectrum to auction off that can be used for wireless-data services. Jim Cicconi, senior executive vice president of external and legislative affairs for AT&T, said in a separate interview with CNET on Wednesday that something needs to be done to deal with the flood of wireless internet service data.
Cicconi and AT&T's CEO Randall Stephenson met with FCC staff members earlier this week to discuss the spectrum issue.
"Clearly, there is a looming crisis that needs to be addressed when it comes to spectrum availability," Cicconi said in an interview at his office in Washington, D.C. "Wireless-data usage is growing far faster than anyone had expected. And if we don't do something soon, we will run out very fast. And then we will have to start telling wireless customers that they can't do all the things they want to do with their devices."
FCC Chairman Julius Genachowski has made freeing up more spectrum a top priority. And he has already proposed that the FCC look into taking some spectrum away from TV broadcasters to give to wireless operators to deliver more wireless-broadband services.
Naturally, the TV broadcasters oppose such a proposal.
For now, it looks as if AT&T will try to slow the growth with hefty prices. It will be interesting to see if its competitors follow suit. Verizon has already amended wireless-data pricing for its low-end phones in an effort to squeeze out more revenue from users. But drastic changes in data pricing could scare off some customers and curb smartphone adoption altogether.
