AT&T CEO Ralph de la Vega's a remarks yesterday suggesting the carrier may adopt usage-based pricing to limit heavy bandwidth use isn't likely to endear the company to already frustrated iPhone customers.
De la Vega said the company wants to give the 3% of smartphone (read iPhone) users that account for 40% of data traffic an "incentive" to change their habits involving extensive video and audio streaming. That could ultimately lead to higher charges for greater bandwidth consumption.
The move would fly in the face of the broader industry trend toward flat-rate pricing and unlimited voice and "all-you-can eat" service plans. AT&T has been a victim of the success of that model as its network hasn't been able to keep up with surging demand from iPhone users. (De la Vega also outlined steps AT&T is taking to improve service in the iPhone capitals of New York and San Francisco.)
Shifting to metered-billing would also seem to provide an opening to arch rival Verizon Wireless, which could tout its lack of such a pricing scheme as a competitive advantage over AT&T, in addition to having a more reliable network. But experts say tiered-pricing is the future for mobile data.
"Carriers' spectrum resources are limited and if these users hog up the capacity, this means less access for others," noted Bill Ho, research director of wireless services at Current Analysis. "This presents a problem with user experience, increases dissatisfaction and ultimately forces a carrier to increase expenses to meet this need."
a GigaOm also cites a study earlier this year by Bytemobile showing that 60% of those in the mobile services industry expect carrier's to adopt variable data pricing as more devices and fatter pipes increase and accelerate consumption.
But the idea of additional charges to reduce bandwidth demand is already riling iPhone users, whom AT&T requires to have data plans to begin with. "AT&T forces every iPhone user on their network to have a data plan. And now they are complaining that users are using the data plan. Unbelieveable" read one post on the a iLounge site, a sentiment echoed by other commenters.