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BillShrink: AT&T Data Caps Mean Paying Twice

5:10 PM -- It won't just be data-intensive mobile apps that cause AT&T Inc. (NYSE: T) users' wireless bills to skyrocket -- at least not for iPhone owners. It'll be any app and song downloaded from iTunes, for which consumers will pay twice, since that data use is counted against their already-limited data plan. (See AT&T Intros Mobile Data Caps, Capping the Data Gusher, and 5 Mobile Apps That Bust Data Caps.)

This is the conclusion that independent service shopping tool BillShrink came to after analyzing AT&T’s new data plans. Consumers can turn to BillShrink.com to determine if they're getting a good deal on their wireless, and more recently cable, service or to pick out a better provider in their area if not.

BillShrink hasn't updated its site to account for AT&T's new caps yet, but CEO Schwark Satyavolu has determined the elimination of unlimited packages will hurt people more and more.

BillShrink's research shows that average data usage per person has risen 3.5 times over the last 15 months. The Nielsen Co. supports this finding, noting that the average iPhone user consumes nearly 400MB of data per month, meaning they'll clearly be among those affected the most. (See Bye, Bye Unlimited iPad Data Plan.)

"The majority of moderate iPhone customers are going to see small savings -- $5 month, but get significantly less flexibility accessing the web from their phones (usage that is growing, especially as more streaming apps get approved by Apple Inc. (Nasdaq: AAPL) as they have been recently)," Satyavolu wrote in an email. "The biggest immediate impact and long-term harm will be on heavier iPhone users and people who tether, who typically have the highest data usage and will be paying overage fees each month."

— Sarah Reedy, Senior Reporter, Light Reading Mobile

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sarahthomas1011 12/5/2012 | 4:33:35 PM
re: BillShrink: AT&T Data Caps Mean Paying Twice

BillShrink.com is one...no, wait, it charges the carriers a licensing fee for referrals. If...wait, I mean when the other carriers make this move too, its analysis will get harder to do. Having tools like this, and AT&T's own Data Calculator, will be helpful for consumers though.

shygye75 12/5/2012 | 4:33:35 PM
re: BillShrink: AT&T Data Caps Mean Paying Twice

Is there a for-profit business that doesn't look for any way possible to extract more revenue from the products and services it offers? I mean, other than in the Bizarro world.

shygye75 12/5/2012 | 4:33:34 PM
re: BillShrink: AT&T Data Caps Mean Paying Twice

Yes, we are ALL in business to help the consumers. Applause and good feelings all around.

shygye75 12/5/2012 | 4:33:33 PM
re: BillShrink: AT&T Data Caps Mean Paying Twice

The idea that wifi is a no-cost proposition is interesting, if true. Imagine gigabytes of music, video, porn, etc. flying around at absolutely no cost to anyone. What's not to like?

DCITDave 12/5/2012 | 4:33:33 PM
re: BillShrink: AT&T Data Caps Mean Paying Twice

I posted a bit on this right here. The short version: AT&T customers can use AT&T WiFi hotspots at no charge. Also, most McDonald's have free WiFi. So there are still a lot of places to browse the Web for free -- or for the price of a cheeseburger.


I think the idea that someone has "paid for content twice" is just silly. You pay for access, that's one thing. You pay for professional content, that's another.


Content costs money to create and it isn't free to anyone, ever. If a $9 album on iTunes bothers Mr. BillShrink because it counts against his data cap, go to Best Buy and pay $14 to $16 for the CD.

fleece 12/5/2012 | 4:33:33 PM
re: BillShrink: AT&T Data Caps Mean Paying Twice

It's not extracting revenue from the subscription mobile product -- that price is going down for the new plans.  It's extracting revenue from the usage of the product's mobile Internet service, which helps align revenue with costs.   Business 101 best practice folks.


And, if you download the apps and content over wifi, it doesn't cost more. 


I'm still seeking info on the femtocell usage and whether it counts on the meter.


 

sgan201 12/5/2012 | 4:33:32 PM
re: BillShrink: AT&T Data Caps Mean Paying Twice

Folks,


The modeling and analysis is based on existing cutomers.  Given that


A) The new IPHONE and other Android phone are multi-tasking.


B) IPAD is multitasking and larger screen


A logical ASSUMPTION will be the data usage will be double, triple or even more.  Now, if that happens, is the NEW DATA PLAN a good deal given the NEW usage pattern??  Or, something as low as 50% increase??


The answer is OBVIOUS....


Dreamer

shygye75 12/5/2012 | 4:33:26 PM
re: BillShrink: AT&T Data Caps Mean Paying Twice

Yes, wi-fi access is free (for now) in many hotspots, but there is a cost in delivering that free service. As hotspots attract more users and traffic loads climb, one of two things will happen. The hotspot operator will leave the existing access line in place, meaning that data rates and performance at that hotspot will deteriorate, or it will have to invest in a more robust access line. That adds up to a lot of lattes to make up the cost. The other issue, of course, is that instead of being tethered to a landline, you are tethered to a hotspot -- wireless, but not truly mobile.

joset01 12/5/2012 | 4:33:25 PM
re: BillShrink: AT&T Data Caps Mean Paying Twice

Yep, not free, rates starting at $3.99 for access, at least if you're not a current AT&T subscriber.

shygye75 12/5/2012 | 4:33:25 PM
re: BillShrink: AT&T Data Caps Mean Paying Twice

Right -- and the traffic growth that is threatening to choke mobile services will eventually do the same for individual hotspots. In the AT&T case, access is walled off for paying customers only, so AT&T has plenty of incentive to keep those spots well served by bandwidth. At some point and in some way, fee-based wi-fi will become more common, even if the fees are disguised in various ways (minimum spend at the coffee stand or sandwich bar, for instance). It's setting up to be a variation on the tragedy of the commons.

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