If Flat-Rate Mobile Data Plans Are So Bad, Why Do Operators Keep Launching New Ones?
from the playing-both-sides dept
On its quarterly conference call, AT&T's CFO once again talked up how the company needed to move away from flat-rate mobile data plans because its networks are being overwhelmed by traffic from a small percentage of its users. This rhetoric -- which is really just trying to warm up the market for future price increases -- comes despite figures showing that AT&T's data revenues are increasing, while its network investment is decreasing. On some level, if an operator like AT&T wants to try to force through higher prices by increased flat rates or usage-based pricing, go right ahead; we'll see just how the market reacts. But all of their talk about their poor overwhelmed networks would go down a little bit better if they wouldn't decry flat-rate plans in situations like this, while they launch cheap flat-rate unlimited plans at the same time, as AT&T has done for the iPad 3G. If AT&T's network is already taxed and cheap data plans are to blame, why launch another one on a device that's built to consume data?Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
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Filed Under: data plans, flat rate
Companies: at&t
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World of Warcraft
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Re: World of Warcraft
MOST gyms operate that way, but not all of them. Visit any major city and you'll find a couple of gyms that are absolutely packed a large percentage of the time. You'll also notice that these packed gyms seem to have the most ancilliary(sp?) offerings to sell to their customers, i.e. clothing shops, juice bars, extra activity rooms, etc.
There are two ways to go about this, in the gym arena AND in the mobile device/network arena:
1. Do as you say, oversell your network/gym (only a maybe in this case) and hope that your customers don't use what you offer to full capacity.
2. Sell the network/gym at a level consistent with your capability to serve, give them a great experience, and monetize the shit out of the increased load. Then use the revenue to slowly expand, get more load, monetize more. And so on, and so on, and so on.
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Re: World of Warcraft
I think the point of Carlo's post isn't that operators sell a product that they hope most people won't use to its maximum. That's a normal part of many business models, including gyms. The point is that the operators sell this product and then bitch when some people use it to its maximum. If the operators have done a poor job of estimating how many customers are going to be "bandwidth hogs" and have to change their prices accordingly, then fine...go ahead. Shit or get off the pot. Either raise your prices or shut the hell up about it already.
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Re: Re: World of Warcraft
They should have never started with "unlimited data". The consumer naturally wants it, and they've trained consumers to expect it. A problem of their own making.
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AT&T can blame 3g open PPTPP
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Plans
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Re: Plans
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This is why I DON'T have a gym membership, I'd almost never use it, not to mention parking farther away in the parking lot, taking the stairs, and living on the third floor... why should I go to the gym. Excercise is free, I even got paid to do it when I was in the Army. Besides I have an equivelent gym at work and apartment... both are free!
If I'm going to pay for something, I'm going to use it to it's fullest extent, otherwise I'm not buying it. Then it's up to the seller to make it more marketable/reasonable to attract my purchase.
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Because...
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On the iPad 3G
A couple of theories I've heard on this:
(1) AT&T is convinced that iPad users will primarily use WiFi, perhaps due to the device being used frequently in the home and at the coffee shop and at the office where WiFi is readily available.
(2) It's another device. AT&T wants to get their customers deeper into this "pay a monthly fee per device" concept. Increasing that ARPU (Average Revenue Per User), even if those new customers aren't using AT&T for their other data services yet. I'm willing to bet very few customers are using this data plan to replace any other they currently have (such as home internet or mobile internet).
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I strongly prefer flat-rate plans
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Instead of 1 $70/month iPhone data account using all 3G data ... it's 2 devices at $70+30/month (iPhone + iPad) ... with a calculated hope that it won't increase overall data usage, but transfer some from one account to another.
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Why Do Operators Keep Launching New Ones?
/obvious
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Flat rate plans
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