AT&T's data plan pricing: Bringing confusion back to the game

AT&T's data plan pricing: Bringing confusion back to the game

Summary: AT&T's data-plan price change may look like a moneysaver for some folks but it brings some confusion back to the mobile phone business and could stifle innovation.

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TOPICS: AT&T
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It's already happening.

I heard from a friend last night who was concerned, following the news of AT&T eliminating its unlimited data plan, about the number of "gigabits" he was using by streaming Pandora on his Blackberry. Was his bill going to go up? How is he supposed to measure the "megabits." And, more importantly, does Pandora or YouTube use a lot of them?

With this move to a two-tiered, no-unlimited-usage pricing plan, AT&T - and any other carriers who follow suit - are throwing confusion back into the mobile business. You see, with an unlimited plan, there comes some peace of mind that a data connection can be used as much as the customer chooses and there will be no surprise charges at the end of the month. For consumers, it's a step backward, even if it's sugar-coated to look like a cost savings.

With caps in place, customers will have to monitor their usage, just as they've done in the past with voice minutes. There's one big difference, though - average consumers grow up with an understanding of time and therefore have a sense of how to track voice minutes. Same goes with things like gasoline. We know about how many miles/kilometers we can travel on a single gallon/liter of fuel - and our cars come with built-in gauges so we can keep track of what's left in the tank.

Data usage is a bit trickier.

I gave my friend a quick lesson on the difference between kilobytes and kilobits and why the difference between them is important but I think my words went in one ear and out the other. My friend wanted to know, for example, how many "megabytes" (hey! he was listening) he's using by streaming Pandora for about 90 minutes a day - roughly his daily round-trip commute and if he was in danger of exceeding the new limits.

I couldn't answer him - because I didn't know.

The Pandora site didn't provide that sort of information - or at least not in a place where it was easy to find. And the carrier sites made me click and guess and click some more until I found some sample usage data charts - and even those weren't all that helpful.

For what it's worth, AT&T's data calculator was the best - unfortunately, it's not advertised or marketed on the site's home page, something that will hopefully change soon, so I had to dig to find it. With some quick math, I was able to calculate that 90 minutes of streaming music daily - by itself - comes to about 2.6 gigabytes of usage per month. And that doesn't count anything else he might do, such as upload photos to Facebook, watch a YouTube clip or even send an email attachment.

Under AT&T's new data plan, his Pandora usage would take him about 600 megabytes over the 2-gigabytes-for-$25 Data Pro plan. For another $10, he'll get 1 more gigabyte of data - bringing his total to $35 per month, or $5 more than he pays now. Who knows what will happen if he streams for a weekend road trip?

Maybe the $5 won't break his bank and I suppose he should be on the hook for a few more bucks seeing how he's one of those heavy data users that the light users complain about. (Luckily for him, existing customers are grandfathered in to keep their unlimited plans.) I can see how some might argue that these new plans are better for customers.

But are they? If he's spooked by overage charges, he's likely to slow down his Pandora usage and less likely to try other data-hog services that may hit the mobile marketplaces. After all, it's one thing to pay a one-time $2.99 for an app but quite another to cough up $10 extra every month because those services max out your data usage. Inevitably, it could slow down the fast-growing mobile app marketplace. Is that a good thing?

Maybe it's just me, but it seems that AT&T is choosing to lower their offerings under the guise of saving customer's money when it's really just trying to discourage usage so its network won't be strained.

By the way, if you're holding out for a new iPhone, you'll be bound to these new data plans. The new plans go into effect on June 7. That's this Monday, the same day that Steve Jobs will take the stage at Apple's Worldwide Developer's Conference to introduce - according to the rumor mill - the next generation iPhone.

I'm so glad I bought a Droid Incredible and signed for two more years with Verizon.

Also see: AT&T's ETF hike: Lock in those iPhone customers for as long as possible

Topic: AT&T

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31 comments
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  • RE: AT&T's data plan pricing: Bringing confusion back to the game

    as someone who has to add phones for a business its nice that my existing phones will be grandfathered but the new ones I'll have to pay through the teeth for.
    jfp
  • The US and its infrastructure...

    Is it any wonder that the US lags far behind a good chunk of the rest of the world in terms of network infrastructure, speed, and capacity? I'm not anti-business by any stretch of the imagination, but Big Business's needs to monetize everything and show double digit growth numbers annually are at direct odds with technological advancement and putting the technology into the hands of the most number of people.
    spammyman
  • AT&T profit improvement plan

    First, I give AT&T credit for two smart moves: they didn't bury this fee increase on some obscure website notice, and they did it while iPhone and iPad users are still locked into AT&T service. As for the doublespeak about "saving customers money", everybody knows this is a price increase, but nobody expects a corporate press release to ever just come out and say it. You might find the more informative statements in AT&T's investor relations blurbs and SEC filings, where mention will be made of improving profits from data service.

    I agree with Sam that consumers will be confused and at risk of the "shock and awe" bill at the end of the month if they unknowingly go over the usage cap. But also at risk are the app developers who must deal with the FUD created by this move. Apps that before didn't have to worry or account for data transfers will need to be re-engineered or risk being abandoned by the market.
    terry flores
  • RE: AT&T's data plan pricing: Bringing confusion back to the game

    I disagree about this being a price "increase", as some have suggested. It is only an increase for those bandwidth hogs who insist that they MUST download everything that they possibly can, from hulu to whatever, just so they can say they did so much from their phone. Those people SHOULD pay more than those who simply check their email, occasionally do a web search, etc. Why should I pay the same $30 per month for very limited web use? I, as many others are, am very excited to have a REASONABLY PRICED plan finally available to me.
    TimmyB
    • Exactly.

      Why should I pay the same for my electric bill as the guy who lights up his house like Vegas for six weeks at Christmas? Let the rates reflect the usage.
      CharlieSpencer
  • RE: AT&T's data plan pricing: Bringing confusion back to the game

    This is great. For two years I paid AT&T $60/month for data service that I barely used just so I could have a connection when I couldn't find "free" WiFi. I'm always moving around. I stopped that six months ago.

    Now I can have my new Mythic phone (I would have purchased an iPhone if this new plan had been in effect) as a "Smart" phone instead of just as a message (SMS) and voice phone.

    Thanks for rational pricing and the right economic signals.
    davisstraub
  • Wow, That was an eye opener

    For me, tethering is actually a bad thing. My monthly usage with out streaming video is well under the 2GB cap but if I were to use my phone as a tether and start streaming television and movies like I do now on my terrestrial data plan, I would need something like 60 GB per month. Basically I watch all television and some movies online.

    Somehow I don't see Hulu getting a lot of love in a market with 2GB of data caps.
    mr1972
  • It may not be as bad as you think!

    At first I was a little miffed at this change. Then I went back to my bills over the last six months and looked at the documented usage on mine and my daughters phone. She's a sophmore in college and I'm Director for IT in a mid-sized company. I have an iPhone with push e-mail (Exchange) and use my phone for data downloads for audio books, electronic books and the occasional YouTube video. Overall, I would say I use my phone about two solid hours a day for network related items. That's actual usage time, not reading time. I also use Pandora from time to time. My daughter lives on her iPhone. She uses Pandora all the time, downloads movies and watches YouTube. I would classify her as a moderate to heavy user.<br><br>Now for the usage. I have averaged 238 MB's on my bill per month with my peak at 320 MB's. My daughter was averaging about 200 MB's a month until summer hit. The last bill had 485 MB's of usage. I guess she has a lot of time on her hands when classes are not in session.<br><br>So the bottom line is, don't use a calculator and guess, just look at your bills. It tells you exactly where you stand. It's right there in black and white. Unless you intend to substantially change your usage pattern, the bills tell all. Take a look. You are probably not as bad off as you think.
    playbak
  • AT&T's Data Pricing? Bring in the competition!

    And start with the iPad - let any carrier provide services so AT7T has some vigorous competition. Then shift to the iPhone, which will really open up pricing competition.

    While I agree that the hogs should be paying more I also believe that the moderate users should be paying a lot less. Competition can take care of that fairly fast.
    Ken_z
  • RE: AT&T's data plan pricing: Bringing confusion back to the game

    I have never liked AT&T. Their less-for-the-money call plans never appealed to me. They should thank the i-Phone for their popularity. As soon as the i-Phine is released to other carriers AT&T will suffer. For me it is Sprint. $69.99 for everything unlimited (except calls to landlines - 450 minutes). Or $99.00 100% everything unlimited. Nothing can beat that (except for maybe the i-Phone).
    meveng
    • RE: AT&T's data plan pricing: Bringing confusion back to the game

      @meveng

      Of course, nothing is truly "unlimited" anyway with cellular carriers. The "unlimited" AT&T plan everyone is upset about them canning actually has a 5GB monthly cap in it, hidden in the fine print of the paperwork. Sprint's "unlimited" plan says they reserve the right to throttle back your connection speed or disconnect your service if you exceed a 5GB monthly cap of theirs. Verizon has always clearly stated that for their "aircards" and smartphones, you can't buy a data plan bigger than 5GB per month.

      But I think the point here *really* is, people are ok with a large enough cap that it doesn't feel like a cap -- and 5GB seems to be a decent/workable place to set it. AT&T is trying to find a way to get the market to feel comfortable with it set down to 2GB -- and that sucks.
      kingtj
    • RE: AT&T's data plan pricing: Bringing confusion back to the game

      @meveng Try Cellular South, unlimited everything for $79.99, add a second line for half price. I'm not 100% sure what network they share, but I think it's Sprint. All I know is I have coverage everywhere, unless NO ONE gets coverage (think camping in the mountains).
      jred
  • So much for handheld multimedia consumption...

    AT&T saw its crap network buckling under the load of quickly growing hunger for hand-held multimedia streaming. So, they once again handcuffed us by jacking up the price for anyone who wants to use their phone for anything more than email. This just gives me one more reason to abandon AT&T as soon as the iPhone is available elsewhere.

    AT&T is becoming known as an ancient, crippled network designed for people stuck in the 20th century.

    Hey AT&T stockholders, you might want to dump your stock before the iPhone moves to other networks. I think it's going to be a bloodbath when they lose tens of thousands of subscribers during the weeks following that event. AT&T seems to be run by a bunch of old men with no vision for the future. Their network sucks, so they just limit what users can do with it rather than improve it.

    I hope AT&T rots in a pile of their own rusty network equipment.
    BillDem
    • Assumptions.

      What makes you think AT&T's competitors won't have adopted similar plans by the time your existing contract is up? Heck, what makes you think they won't all announce similar plans by the end of the month?
      CharlieSpencer
  • Not just inconvenient...

    It IS inconvenient to the customer to have to monitor usage -- not something anyone is prone to do (or able to do easily) in the midst of data usage. So it does speak of ATTs lack of concern for the customer experience. But it also speaks of ATTs lack of confidence in their own ability to provide sufficient bandwidth. This is really striking in that regard, because the major selling point of "smart phones" is their ability to do "all this stuff" while mobile without carrying around another larger device. Did the Apple/ATT alliance not measure potential bandwidth requirements before "going live"? They must have. And they cannot claim ignorance -- after several years of YouTube, we know what its bandwidth usage is. After many years of email, Facebook, etc., etc., we know what bandwidth usage is. How can they only now be going this route, 5 years in, which is a statement of inability on their part to provide what they should have known 7 years ago???

    I'm just not buying it. It's not to save most of us money. It's certainly not to make things more convenient for us...or give us more peace of mind. It's to make ATT more money. Period.

    Bad PR move. Bad customer relations move. Some competitor has a very nice opportunity to step in and offer unlimited data service and snap up significant market share. TMobile, are you listening?!?!
    Techboy_z
    • They could definitely make it easier.

      When I connect with a Verizon AirCard, the first think I see is a message telling me how much data I've moved and when the counter will be reset. If they can do it with this technology, all providers can do it when a phone connects.
      CharlieSpencer
  • RE: AT&T's data plan pricing: Bringing confusion back to the game

    Somewhere a Skype executive is cursing AT&T.
    hawks5999
  • Will same over 90% of people $15 per month

    Great move by AT&T. Why pay for all that bandwidth if yoy are not using it. Only the Bandwidth hogs are affected and then it will only cost them $5 more. I don't get why all these people are upset. The ignorant media don't know what is going on.
    This is a price DECREASE for 90% of iphone users.
    wefree1@...
  • RE: AT&T's data plan pricing: Bringing confusion back to the game

    Your math doesn't seem to be right if you are indeed using the AT&T calculator. According to the calculator, 10 mins of streaming music a day is about 0.17 GB. Therefore, 90 minites per day, should be about 1.53GB (i.e. 0.71 * 9) not 2.6GB.

    Another way to check this is to use the legend on the calculator page. It says 1 minute of streaming music is about 500KB. Therefore, 10 minutes per day would be about 5000KB or 4.8MB (1 MB=1024KB). So 90 minutes per day would be about 44MB. For 30 days, that would add up to 1318 MB or about 1.3GB (1GB=1024MB).
    zdnet.gen.user
  • Killer for free Apps and the iPad

    I think it will also hurt App developers. I'm not going to pay $2.99 for an app that I'll only use occasionally. But I don't mind downloading a free app with ads. In fact, several of these are in my most used list. However, if they are going to bump me over the top, I'll just stop using them. I'll think twice about going to YouTube and probably end up not doing it. Forget running AT&T's app to see how much data I've used, I'll wait and look on my computer.

    Also, why go buy something like the iPad when AT&T is trying to limit my usage of it?

    Great move AT&T.
    kevinddavis