It's tough to make a long-term deal only to find that conditions change and your bet doesn't look so smart. I'm wondering if that's really the condition behind AT&T (T) complaints of how much data smartphone users are pushing through its network has more to do with some revenue miscalculations with Apple (AAPL), and maybe other vendors as well.
Via Consumerist, I came across a Boy Genius Report from August that AT&T would require users with smartphones to have data plans.
AT&T's claimed reasoning behind the move: to ensure customers receive a predictable bill each month. Mmm hmm. Note that this only applies to smartphones purchased from AT&T or a dealer of course, so those of you who opt for unlocked handsets should be unaffected.The Consumerist noted that according to a report by Strategy Analytics from the summer, 65 percent of users said that they would drop or scale back mobile data spending because of economic conditions.
If the Strategy Analytics study was correct, there were probably many people cutting back or dropping their data plans. The Consumerist "cynical translation" was that many AT&T users had ended data plans, found themselves using too much data on a pay-per-consumption basis, and then called customer service "to whine about it." I'm not going to knock that interpretation, but here's an additional one.
When AT&T did the deal with Apple for exclusive access to the iPhone in the U.S., it promised a significant portion of service revenue to the vendor. When people cut back their data plans, there was suddenly a lot less monthly revenue for many customers, including iPhone owners. But AT&T was likely stuck having to continue to pay Apple the share of revenue originally expected. I'm not suggesting that this is the only factor, by any means, but it sounds like it might be a significant one.
Of course, an AT&T exec is now saying that speculation about its changing data plan prices for smartphone users is all rampant nonsense, though it does plan to offer "incentives" for people to limit web surfing or application downloading. It probably hasn't helped that some have noticed that the company seems to have plenty of money to invest in infrastructure if it really wanted to. According to TechDirt, it received email from AT&T PR saying "that the real numbers -- the ones we don't see -- are going up, but provide no evidence." Claims without figures to back them up aren't convincing. And then there are the questions of whether mobile data use is high enough to cause what would objectively be seen as trouble.
Whether AT&T miscalculated or not, it all still comes down to a company blaming the customer for problems that resulted from its own decisions. And that's usually a bad long-term positioning to take.
Image via stock.xchng user secureroot, site standard license.