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
    Dark Helmet (profile), 22 Apr 2010 @ 6:37am

    Re: World of Warcraft

    "In the same way gyms hope 80 percent of their members do not ever cross the door."

    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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