
AT&T chief regrets offering unlimited data for iPhone - jacketseason
http://bits.blogs.nytimes.com/2012/05/04/att-randall-stephenson/
======
lectrick
“You lie awake at night worrying about what is that which will disrupt your
business model,” he said. “Apple iMessage is a classic example. If you’re
using iMessage, you’re not using one of our messaging services, right? That’s
disruptive to our messaging revenue stream.”

Dude, go eat a bag of dicks. Seriously. You are, in 2012, STILL making $1,250
dollars per MEGABYTE of text message data. If there's anything that requires
"disruption," it's the disgustingly gross excess of the text messaging
business model. Long live capitalism and innovation.

~~~
tiles
It's incredible that he worries about disruption, when if AT&T were to disrupt
its _own_ text message model, they'd be lauded for it by customers and
technology advocates.

What do large companies gain by not being the first to disrupt their own
markets, aside from obsolescence?

~~~
rudiger
_> What do large companies gain by not being the first to disrupt their own
markets?_

They can continue to extract massive profits from their existing market.

~~~
SatvikBeri
This is the key point of _The Innovator's Dilemma_. On the one hand,
disrupting yourself means cannibalization and strategies that almost certainly
seem unprofitable on paper. On the other hand, if you don't disrupt yourself
someone will do it for you.

Considering Apple's success I'm inclined to say that disrupting yourself
before anyone else has the chance to is the right long-term move, but I
haven't studied the topic in enough detail to be sure.

~~~
Retric
The iPhone attacking the iPod before Android did so is IMO a great example of
The Innovator's Dilemma. Many companies would have tried to charge more for
iPod capability's on the first generation iPhone. Instead Apple realized
cellphones would never be great MP3 players so even if they cannibalized some
sales early on trying to maintain an artificial distinction would not be
useful in the long run.

In some ways I think they even helped keep the iPod concept alive longer by
giving the impression that using a phone for an MP3 player was a compromise
not a replacement. Yea, your phone can do this, but why waste the battery
life?

~~~
raganwald
And we are watching Apple’s iPad dancing around the outskirts of the MacBook
Air market. A more old-school market would be working very hard to force the
markets to be completely segmented, strongly differentiating OS X from iOS and
so on.

Instead, Apple is making OS X behave more like iOS, reducing the
differentiation and creating opportunities for the iPad to steal MB Air sales.

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macspoofing
The way Apple introduced the iPhone was as revolutionary as the product
itself. No carrier garbage on the phone, no carrier control of the end-user
experience, "open" platform for apps (that came a little bit later), and
unlimited data.

~~~
necubi
Apple invented none of that. My first smartphone, the Treo 300 (released in
2003) had no carrier garbage, was a much more open platform than iOS, and at
least on Sprint came with an unlimited data plan.

Those features were unusual in the dumb-phone dominated industry at that time,
but were omnipresent when it came to smartphones.

~~~
dalore
In America the carriers controlled the market and the device manufacturers
where beholden to them. In Europe it was the other way around.

~~~
protolif
This is slightly off-topic, but I remember reading about a European initiative
for a standard mobile charger a while back. Did that actually happen?

~~~
dalore
Yes and no. There is a standard (microUSB) but they don't have to adopt it.
The devices makers just have to make sure there is an adaptor to microUSB for
their device is available (they don't even have to ship it with their device,
just has to have one in the market somewhere). So much for standards I guess.

------
protolif
AT&T seems to have forgotten how many customers they gained by being the only
network to offer iPhone for a long time. Now that they've got those users,
it's easy to take them for granted, and wish they'd done things differently.
Had they not offered an unlimited data plan in the beginning, Apple may have
went with another provider. Apple benefits from commoditizing industries
adjacent to their main: hardware.

Mobile internet access is a commodity, just as wired internet access is a
commodity. Most ISPs today advertise UNLIMITED LIGHTNING FAST DOWNLOAD SPEEDS,
knowing that their network can't support everyone downloading at that speed at
once.

It's like gym memberships. Gyms can't support all of their members showing up
at the same time. In fact, they profit on the fact that most people
underutilize their membership. What gyms don't do, is harass, limit, and
double charge members who show up every day, to work out and get their money's
worth.

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irons
Stephenson really should have been called out in the article on the assertion
that every megabyte downloaded has a marginal cost. There's no way to squint
at that hard enough to make it true.

[http://arstechnica.com/tech-policy/news/2012/04/why-we-
shoul...](http://arstechnica.com/tech-policy/news/2012/04/why-we-should-worry-
about-the-decline-of-the-unmetered-internet.ars)

~~~
jessriedel
The article you link to really doesn't support your claim. Yes, bandwidth is
plentiful off-hours and expensive during peak times, so pricing based off of
total usage regardless of when the data is used is crude. (This is why voice
plans have had things like "weekend minutes".) But a heavy user really does
have a higher marginal cost than a light user. In the absence of more
complicated pricing (which consumers often reject), data caps are reasonable.

~~~
ori_b
I'd love to be able to pay _reasonable_ data charges per megabyte. The problem
is that overages are currently insane, compared to what it costs for fixed
monthly rates.

~~~
jessriedel
Agreed. This exists for the same reason the costs of text messages are so
exorbitant: lack of competition.

~~~
bdb
Doubtful. I think both are too expensive, but both data and SMS plans are only
able to be priced where they are because of breakage[1].

[1] <http://en.wikipedia.org/wiki/Breakage>

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louischatriot
This reminds me about bosses of incumbent French telcos when Free launched at
a third of their prices for a better plan: "this is terrible, our margins will
go gown!" instead of "That's terrible, now our customers will see we were
ripping them off!".

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seanmccann
Data really has to be near unlimited, it's too difficult for folks to
understand how much 1MB of usage is. I have a 6GB data plan and no matter what
I do, I never hit 6GB. This is essentially unlimited to me.

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rylz
I would argue that it was the existence of unlimited data by default that
"pushed the phone industry into a data-driven model," which Stephenson
acknowledges to be a good thing. Without unlimted data, especially in the
early days, you would have had customers fretting over every MB rather than
engaging with the full app ecosystem and freely exploring the capabilities of
the new technology.

~~~
saurik
Buy that same logic we should sell people unlimited electricity plans, and see
what that does to electric companies when people stop fretting about each and
every milliwatt of power they are using.

The problem is that when customers stop caring about how many watts of power
they are using and start purchasing products made by manufacturers that no
longer are serving a market that has any notion of efficient power consumption
you will get the exact same situation that is happening with mobile data.

Specifically, products that use an immense amount of power for a killer
feature (such as electric cars; analog being gigabytes/day data usage for
things like Netflix) will start proliferating, increasing the average power
usage of each person above the floor used to calculate the cost of the
unlimited plan.

In that situation, it is fairly obvious that the power company is then going
to have to change their rate scheme, as otherwise they are just subsidizing
electric cars: neither the users nor the electric car companies (again,
Netflix) are otherwise paying for the increased societal power usage.

The temporary initial reaction will then simply be to ban electric cars from
the power grid (as happened with Netflix: did not work over 3G due to the
bandwidth cost) while the rates are restructured, a return-to-sanity would
occur where unlimited plans are dropped, which then will allow those high-
power-using products to actually be distributed to users.

The whole while, of course, people will be whining on forums about how power
companies have already laid out the cable, and how the marginal cost of power
is effectively zero at some points during the day, and how unfair it was for
the power companies to take away the unlimited plans; and, when a
representative from the power company points out that it was a mistake, he
will be lambasted.

~~~
rylz
I don't argue that AT&T's more recent decisions to stop offering unlimited
plans were not both reasonable and rational. I'm just saying that, in light of
Stephenson's comment that AT&T is happy with the iPhone deal for turning its
business into a data-driven one, the unlimited plans may have accelerated that
change. So if that was a serious goal for AT&T, maybe they shouldn't regret
their initial offering of unlimited data, even if it makes much more sense now
not to offer.

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cbsmith
His comments about the variable cost are misleading. Firing extra packets on
their network doesn't cost them more.

Here's my post on + about it:
[https://plus.google.com/117025825144195468236/posts/KEj5e3nk...](https://plus.google.com/117025825144195468236/posts/KEj5e3nknD4)

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ivankirigin
Unlimited data is the only reason I'm still on AT&T at all

~~~
anonymoushn
The unlimited data plan has a lower monthly data limit than the tiered plan
with the same cost.

~~~
techsupporter
Not any longer. AT&T revised its soft caps in March. For grandfathered
unlimited users on a 3G or HSPA+ device, the soft cap kicks in at 3GB; LTE
users see the soft cap at 5GB.[0] Provided a subscriber is using the LTE
version of the unlimited plan[1], he or she makes out better than the current
$30 offering, which is 3GB regardless of device.

0 - [http://www.engadget.com/2012/03/01/atandt-announces-
throttli...](http://www.engadget.com/2012/03/01/atandt-announces-throttling-
changes-now-kicks-in-at-3gb-or-5gb-fo/)

1 - The same soft cap applies even if a subscriber is in a non-LTE area or
using a non-LTE device, but has at some point activated an LTE device. The
differentiation is the plan. Activating an LTE device with grandfathered
unlimited will put the LTE version of unlimited on the account, even if the
subscriber lives in an area where LTE is not yet offered.

~~~
anonymoushn
I see, thanks. I now feel silly for moving off the unlimited plan when I was
told I had to to get a plan with tethering.

------
Karunamon
Meanwhile, I regret ever having given AT&T a single cent, as they're obviously
a bunch of greedy, out of touch morons.

------
radishroar
Hmm, no regrets on the ill-posed T-Mobile attempt?

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jbverschoor
That's the same as "we regret that we can't do dialup modems
anymore".Basically they need to find other business models.

Maybe PAYMENTS????

telcos suck.. lets start one

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ludflu
i liked this comment: how much does he regret giving tmobile 6 billion dollars
for a failed merger attempt?

~~~
jrockway
That was a good gamble. If he got T-Mobile, he could easily charge whatever he
wanted for GSM service. Hell, he could have charged the first person the 6
billion dollars. What could go wrong?

------
diminish
I am curious if AT&T will some day regret offering iPhone, like did they
really acquire long term customers from others?

------
j45
I'm sure people regret AT&T too for the same unlimited data and not delivering
a network

------
tylerlh
See this? It's the world's smallest violin playing 'My Heart Bleeds for You'

~~~
astrodust
I think AT&T has that ring-tone for $2.95.

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loverobots
_“You lie awake at night worrying about what is that which will disrupt your
business model,”_

Your business model is ripping people off, I hope you die of insomnia (not
literally). Phone bills have skyrocketed in the past 5-10 years as everyone
has a cell and as salaries more or less stay the same. Let's not even talk
about customer service.

~~~
qq66
But people are spending far more time on their phones today than they were
5-10 years ago. It shouldn't be a surprise that they're spending more money on
their phones, accessories, telecom service, apps, etc. than they were 10 years
ago, regardless of what their salary is, since the phone is involved in more
aspects of their life.

For what it's worth, if you want to use your phone in exactly the same way you
did 10 years ago (occasional short voice calls), you can do it much cheaper
today than then, with a TracFone.

~~~
loverobots
Go and get the cheapest Verizon plan and see how it ads up close to $100 (incl
tax and fees.) I have one, no data at all and a 2008 phone.

~~~
qq66
Verizon is an expensive provider. The cheapest Tracfone plans are $12 per
month if you only make a few calls per week.

