May 11, 2009

iPhone Users Making Pain for AT&T Data Network

Wall Street Journal's article "Demands on Network Are an iPhone Hang-Up" has given me a whole new perspective on AT&T's charge for its unlimited data plan for iPhone 3G ($30/mo). I have made countless remarks against the higher rate on this blog; my argument has mostly been based on that increasing data plan cost may keep consumers from engaging, hence taking a step backward in the mobile evolution.

Boy, was I wrong on two counts.

1). $30 per month unlimited data did not deter people from signing up. It turns out the $199 iPhone entry price is more than enough of a sweetener for people to sign up for data. It could be that I work in NYC and live in a town full of young professionals, but the amount of people I encounter with iPhone 3G is insanely high. Perhaps this was their strategy all along, going after people with higher disposable income whereas I am speaking for general public as a whole.

2). At $30 per month, I guess AT&T isn't making out like a bandit considering average iPhone owners use up to 4x the data bandwidth compared to other smartphone users. This puts a huge amount of stress on AT&T's network thus requiring them to invest more money into system upgrades to keep up with demand (otherwise, users will complaint and may even be driven away to competition).

I am at a lost at this point. My old data plan from AT&T was $20 per month w/ 200 free SMS (Media Max 200); this plan is nearly identical to the original iPhone data plan. When I upgraded to a 3G iPhone, I had to pay $35 per month to get equivalent service. That is a 75% increase from before, yet, we are being told even with such increase, AT&T's network could be hurtin. I gotta tell ya, something is not adding up right.

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