June 9, 2010 – If you’re an iPhone or iPad owner you may have already heard that AT&T is changing their data plans. There will no longer be an “unlimited data plan” available for new customers on either device. Existing customers are grandfathered in making it possible to keep your unlimited plan, but certain requirements apply. See my articles “AT&T Changes Data Plan for iPhone and Smartphone Users” and “AT&T Changes the iPad 3G Data Plans” for more details.
On Monday June 7, 2010 Apple CEO Steve Jobs gave the keynote address at their World Wide Developers Conference (WWDC) in San Francisco and announced the new iPhone 4. This beautiful piece of hardware will be shipping at the end of June and will include the new iPhone operating system know as iOS4. The new operating system offers many new customer requested features like multitasking, background audio, VoIP capabilities, background location, push notifications and task completion notifications. All of these features plus many, many more will greatly enhance the user experience and make the iPhone more like a computer than a SmartPhone.
Many of the new iOS4 applications can run in the background while other applications are running in the foreground. For example, you could listen to streaming music from Pandora while at the same time surfing the web or playing a game. You can receive notifications from the new Farmville app that it’s time to harvest your crops and watch YouTube videos at the same time. You could even be talking on the phone while you upload and entire photo album to Flickr. These are awesome features and capabilities that the consumer will love, but they all require a data connection to AT&T’s 3G network.
Multitasking is a feature consumers have wanted in the iPhone since day one. Apple has figured out a way to give it to us without adversely affecting our user experience or quickly draining the battery. What hasn’t been figured out was how AT&T would handle all of the additional bandwidth this new device would require. AT&T representatives say they are working hard to perfect their 3G network while at the same time racing to develop their 4G network. The only way to handle an increase in network demand is to expand the network or restrict network usage.
iOS4 will be released this month in conjunction with iPhone 4 and will allow 3G and 3Gs users to upgrade to the new operating system for free. Adding multitasking to that existing iPhone customer base will greatly affect data demand on AT&T’s network and since existing customers are grandfathered in they’ll still have unlimited data access. Add to that all of the iPad 3G users out there that are streaming music and movies to that big beautiful screen and you’ve got an overloaded and very slow network that will deliver a poor user experience that nobody wants.
So what is the most cost effective solution, put a cap on the data to restrict usage. If customers know they’ll be charged more for going over their data limit, they’ll be a little more conscience about their usage. AT&T will also send text reminders letting you know when your limit is nearing, giving you the opportunity to contact AT&T and purchase additional bandwidth if needed.
AT&T says “We’re making it possible to break free from the traditional one-size-fits-all pricing model and letting customers choose the data plan that best meets their needs and budget.” While I think this is a legitimate reason to change the plan structures to accommodate the needs of users that require less data, they still could offer the unlimited plan to those who want it. The unlimited plan has been in place for three years now and AT&T just came to the realization that maybe they should offer lower usage plans. They didn’t seem to mind making it mandatory for iPhone users to pay $30 a month for a data plan that they now say nearly 98% of their customers don’t use more than 2 GB per month. The tiered pricing could have been offered a year or two ago once they had a track record of data usage.
Personally I don’t buy it. While I think the tiered pricing and caps will be better for the customer, it’s not necessarily because they will save a few dollars a month. It’s because their user experience will be a little better because the network won’t keep going down. iPhone users in San Francisco, New York and other major cities are already experiencing network congestion. Restricting access is a temporary fix to a long term problem. The AT&T network needs to be built out to handle the demand, or the iPhone and iPad need to be opened up to other networks allowing them to share the load.
What are your thoughts? Do you agree with AT&T’s decision to eliminate the unlimited plan? Post a comment below, I’d love to hear from you.
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Founder of Current Photographer, co-host of The Digital Photography Cafe Show, Designer, Photographer, and overall tech geek.
I’m sure you are right. If they allow to many people to use thier bandwidth they might actually have to offer a better service!
Shame on them.
Att is in no position to change a data plan that’s been working for years. Especially when they’re 3G service is constantly being ridiculed. If there were to be any change in the data plans it would be much more strategic for them to keep their former unlimited data and just lower the price. This is coming from a current iPhone 4 customer, but I hope verizon gets it and blows AT&T away