WSJ: AT&T should charge more for iPhone users

Last week we heard AT&T might be charging less for iPhone usage.  Today, the Wall Street Journal is saying that AT&T should charge more for data hungry iPhones.  iPhone users use the web much more than any other smartphone’s users (except Android?) and according to comScore, web usage is much more data intensive than other network tasks like email or chatting.

The 3.0 version of the software will only increase usage because of the push notifications.

Users of iPhone download games, video and other Web data at two to four times the rate of other smartphone users, according to comScore. Yet AT&T charges iPhone subscribers the same fee of $30 a month for data that it levies on other smartphone customers. And aside from restricting certain activities, like file sharing, AT&T doesn’t limit how much data can be downloaded.

But Web applications popular with iPhone customers are bandwidth hogs. A recent analysis by Alcatel-Lucent of North American wireless network use during the midday hour on one day found Web browsing was consuming 32% of data-related airtime but 69% of bandwidth, while email used 30% of data airtime but only 4% of bandwidth. Email taxes network resources but in a different way.

As the proportion of customers with iPhones grows — 5.9 million 3G iPhones were activated in the last three quarters, 7.5% of AT&T’s total subscribers — the resulting growth in downloading and Web browsing will strain AT&T’s network. AT&T will need to add cell towers and spend more on the back-haul lines that connect the towers to the rest of the network.

Because of this increased cost, the WSJ thinks the carriers should go away from unlimited bandwidth.

In the short term, carriers should abandon unlimited data pricing plans. Both AT&T and Verizon Wireless already charge extra for heavy users with wirelessly connected laptops. They will have to contemplate similar strategies for smartphone users.

Bad idea.  One of the best features about the iPhone (and other smartphones for that matter) is that you don’t have to count your packets in and out.  There is know worry in the back of your mind about what your bill is going to look like.   Changing a huge part of the iPhone model could have adverse affects on the whole ecosystem.

We also think their model might be too simplified.  First of all, the cost of extra packets to AT&T isn’t directly proportional to data plan cost.  Once the infrastructure is in, ramping up data throughput is much much cheaper than putting in new towers.  Also, the price of the equipment is coming down as well as the cost of bandwidth.

This doesn’t mean that AT&T isn’t planning something like this, perhaps that is why we are hearing all of this Verizon chatter.