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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?

Filed Under: data plans, flat rate
Companies: at&t


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  1. icon
    Alan Gerow (profile), 22 Apr 2010 @ 1:25pm

    Another point to consider is that a large majority of the iPad subscribers also own iPhones. So, some logic could attribute data usage from an iPhone owner over 3G will go down being replaced by the iPad. So, they'll get the users to pay for the data usage by getting them to spread it over several devices with separate data plans hoping the data usage on any single device will go down.

    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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