Archive for June 2010
As my fiancee and I are shopping around for a new smart phone plan, AT&T just dropped a bombshell as far as the cell phone world goes: it’s getting rid of unlimited data plans for smartphones. From the WSJ:
AT&T said Wednesday it will eliminate its $30 unlimited data plan for new smartphone subscribers starting June 7, when Apple Inc. is expected to announce its latest iPhone. The plan will be replaced by new offerings costing $15 an month for 200 megabytes of data traffic or $25 a month for 2 gigabytes. AT&T says 98% of its customers use less than those amounts. Users who exceed 2 gigabytes of usage will pay $10 a month for each additional gigabyte.
Logically, it would seem to make a lot of sense for customers to like this. If 98% of them don’t use this much data, then that’s $5 (or more) per month cheaper for them to use. Moreover, it captures the negative externality that some cell phone users place on others – that is, they’re overconsuming the network bandwidth and not paying for it.
On the other hand, I see serious potential backlash. First, those that develop media-heavy applications, particularly the MLB’s baseball game streaming application and other such developers will likely use a ton of their users. Second, many users will psychologically face some stress now in deciding what to do with their phones, and may potentially spend time and energy considering which applications to use at which times. One of the joys people seem to get out of smartphones (I don’t have one myself, but what I observe) is that you can do whatever you want with it, whenever you want to. If all of a sudden you have to keep a close eye on the bandwidth meter, things become a little more constrained. Now having a smartphone may require keeping an eye on a variety of different meters – you’ve got to check the battery frequently since these things are power-hungry devices, and you also need to keep an eye on your bandwidth meter.
Anyway, I see some pros and cons here. Logically this makes a lot of sense, but I can see that some people would be pretty uncomfortable about this. I am sure that Verizon and the other networks will have an interesting choice to make: either take this opportunity to hop on board with AT&T or take this opportunity to claim that AT&T’s network is so weak and overused that it had to start charging for bandwidth usage. I hope, at the very least, that this will spur a bit more price competition from all of the major carriers.