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AT&T’s Mobile Data Cap Is Not End of World

Written on
Jun 2, 2010 
Author
Gavin Dunaway  |

IphoneADOTAS – Can you hear the iPhone fanatics screaming? Oh mah gawd! AT&T is stripping unlimited data usage from me! Take my money, then my data? You telecom bastards!

As readers may know, I’m not the biggest fan of AT&T — find someone in New York that doesn’t complain endlessly about AT&T’s 3G coverage, dropped calls and less than stellar customer service and I’ll buy you lunch  — but AT&T dropping its unlimited data usage plan in favor of two cheaper data plans is not likely to be the pitchfork-and-torches moment that AT&T haters have been waiting for. (Cultofmac.com featured a photo of a circle of middle fingers next to the announcement.)

In fact, it looks like most AT&T smartphone users will benefit from the change in service expected to be introduced with the iPhone 4G on Monday. Instead of $30 for unlimited data usage (the plan current subscribers will get to keep), new subscribers will be able to choose between 200 megabytes at $15 a month or 2 gigabytes at $25. At the 200-meg rate, overage is $15 for 200 extra megs; at the 2-gig rate, it’s $10 for another gig. However, even current users of the 3G iPad will be forced to pick one of the new plans.

Now consider this: Consumer Reports released a study with online bill analysis firm Validas in February suggesting that at an average of 273 megabytes per month, iPhone users consumed five times as much data on average than BlackBerry users (54 megabytes). Other smartphones, not including BlackBerrys, take an average of 150 megabytes monthly. Twelve percent of iPhone users gobble up more than 500 megabytes per month, with a third of that group using up more than a gigabyte a month.

The information in this report was collected through November 2009, which is notable as Android usage has increased a good deal after the introduction of the Verizon Droid that month. Also, as everyone in this industry can attest to, tech changes fast and megabytes can turn into gigabytes overnight. Streaming mobile video has been running the whisper circuit for a while now — imagine how quickly that will run up data usage.

Still, this move will likely benefit most AT&T users — for the moment. And $10 for an extra gig is surprisingly reasonable (compare that to Verizon’s 20 cents per megabyte under the 25-meg data plan — a gig would run $200 ).

But there’s also a perception issue here — instead of building a better network to fully support its users with what it promised, AT&T is back-pedaling by putting caps on usage. AT&T probably should never have offered unlimited data plans in the first place, but they did, and taking it away stands to further worsen AT&T’s bad rep in many consumers’ mind.

Will Verizon follow suit in canning its unlimited usage plan? Wall Street tech analysts are guessing so much in the coming months. Many signs point to the imminent release of a Verizon iPhone, with an unverified report on TheStreet.com suggesting ongoing negotiation to release it by the end of the year. Some industry insiders think secretive Apple CEO Steve Jobs tipped his hat at the All Things Digital D8 conference yesterday by refusing to deny the cherished mobile device is making a leap to other carriers.

However, if the iPhone doesn’t find its way to other carriers, Android could get another leg up on mobile device numero uno — especially if AT&T competitors Verizon and Sprint keep unlimited data usage plans. Already Android has made significant gains in the space with version 2.0 installed on a slew of popular devices, and the next upgrade will offer several features you can’t get on an iPhone.

I’ve noted before, people love Apple but hate AT&T. I’ll add that the problem with walled gardens is that you tend to box yourself in.





Gavin Dunaway is Editor, U.S. at AdMonsters, a leading trade publication, event producer and service provider for the online advertising industry. Previously, he had been Senior Editor of Adotas, where he arrived after years of ping-ponging around various industry publications. This Washington, D.C. native and George Mason University graduate also enjoys playing electric guitar so loud that the walls shake.

Reader Comments.

As an iPhone developer I read the headlines and was ready to get all upset. Then I saw the 2 GB cap for $25 and realized that this was not a bad deal at all. In all the time our company has had iPhones (which is as long as they have been out) the most any one phone used in a month was just under 1 GB. With the multiple phones we have, even if one goes over the 2 GB cap every month, we will still save money every month switching to the new $25 a month plan.

Posted by Brad Waller | 3:50 pm on June 2, 2010.

For the majority of iPhone users, it’s a better deal — not something to write home about, but still not bad. I mainly wonder what increased mobile video viewing will do to data usage.

Posted by Gavin Dunaway | 8:17 am on June 3, 2010.

Those who are finding the new AT&T data plans acceptable are swallowing propaganda hook, line and sinker.

The hidden problem? Apple’s now in the mobile ad biz. Mobile ads are going to be HUGE bandwidth hogs. I suspect it’s likely that every single iPhone user worth the label is going to find his or her or their AT&T bill soaring under these new plans.

After all, when’s the last time you saw a major corporation do something that resulted in less income for it and lower costs for its customers? Come on, now. Quickly.

Thought so.

Posted by Dan Shafer | 11:59 pm on June 3, 2010.

Great point, Dan — I wondered about the same thing. At this very second, it’s a good deal for AT&T subscribers, but for how much longer?

PS — Interesting article suggesting that mobile video’s growth will not be hindered by data plan limits on DigiDay:Daily.

Posted by Gavin Dunaway | 8:28 am on June 4, 2010.

Not sure how I feel. I use 3g unrestrictor to watch youtube videos occasionally, listen to pandora a lot on the road, and surf more on my phone than I do on my computer. I average anywhere from 3-10 GB per month depending on usage. I use WIFI when at home. I don’t know how I did 10 GB, but normally stay within a 5GB cap. Going up to a 5GB cap wouldn’t be so bad, but I’m pretty p1ss3d off about a 2 GB cap. Doesn’t help further media development on the iphone… quality media that is.

Posted by hmm | 4:07 pm on June 5, 2010.

As a brand new iPhone 4 owner, i hate the capped data because it is easier to just pay 30 bucks a month for unlimited than 25 for 2 gb an 10 bucks for every other gig i use. But for someone who makes alot of money this would not bother them but us low income Americans cant afford 2 pay a $200.00 phone bill a month. I mean im just sayin. By the way I absolutely love my iphone 4. Great job Apple.

Posted by Iphone user | 10:49 am on December 13, 2010.

THIS SUX luckly im grandfathered in at 30 unlimited. i for the first time in 3 years have used 2.8 gigs 11 days into my billing cycle.
i bought a slingbox.on my lunch break i watch a hour of tv on my phone.and going home i watch 30 min of tv. plus browse a few webpages send a few emails with pics it adds up quick.so this sux for people that dont have unlimted and plan to use data heavy apps like a slingbox player if verizon dont take away there unlimted plan and get the iphone on there network i think most will jump ship and sail onto verizons network as having unlimted is a big plus on a phone that is nearly a small computer and we find our selves using our pcs less and less because our phones do most of what we want on our day to day operations this is a terrable move for att

Posted by frank | 10:19 am on December 24, 2010.

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