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Carriers Blame the iPhone For Data Caps and Increased Upgrade Fees
zacharye writes "Bruised mobile carriers such as AT&T and Verizon are 'fighting back' against Apple's iPhone, despite the fact that the device has helped them eke out consistently higher average revenue per wireless subscribers since its launch. To hear the carriers tell it, the iPhone is a major inhibitor to their profits as last year they were 'only' generating wireless service profit margins in the 38% to 42% range. But ever since these beleaguered companies started 'fighting back' by implementing data caps, increasing fees for device upgrades and implementing longer waiting periods before users can switch devices, they’ve seen their wireless service profit margins surge. AT&T reported a 45% margin in Q2 2012 and Verizon reported a record-high 49% margin."
Anyone who spent 10 mintues with the iPad, and iPhone would realize they are enormous bandwidth hogs. You don't have to be a telcomm. engineer to see that video chat, and Netflix are killer apps. in terms of backhaul, spectrum and popularity.
They didn't plan properly, didn't spend appropriately and now they are punishing and blaming their users for using these devices exactly as they were designed.
In other news, in other parts of the world, some carriers just do manage their infrastructure correctly and the prices are actually going down instead of going up.
So please, stop blaming the customers and start rethinking your now-stinking strategy.
Write boring code, not shiny code!
With the iPhone and Android devices, people find them useful enough to - gasp! - actually USE mobile data allotments!
I can see why AT&T and the other carriers were caught off guard there.
#DeleteChrome
American CEOs live by the Golden Parachute philosophy:
Attain a high level position on the board, if not the CEO chair itself.
Enact short sighted, but highly lucrative policies for the short term.
Rack up a HUGE "profit".
BAIL! BAIL! BAIL!
Eject from the burning enterprise as it crashes into insolvency, and deploy the golden parachute.
Majestically float into the next board meeting at the next fortune 500 corporation.
The carriers went to great pains to advertise all of the bandwidth-hogging things you can do with their phones, such as video chat, streaming movies etc. Now that their ad campaigns have proven successful and people are actually doing all those things, the carriers find that they cannot hold up their end of the bargain. Their solution to this problem is to blame their customers for using what they were sold.
They need to put some of those profits into improving their infrastructure so they can deliver what they sold. An awful lot of businesses would be very happy with profit margins half of what these guys are getting.
Some mornings it's hardly worth chewing through the restraints to get out of bed.
Which part is obscene? That they make a 38% profit margin or that it's not enough for them? To me it's a toss-up.
These ass clowns could have money shooting from every available orifice, on-demand and in any denomination they desire (Including Berkshire-Hathaway Class A stock), and STILL they'd complain that their revenues were impacted.
Basically they're using the following formula:
100% profit is:
* Not actually having a service to keep running/support/etc.
* Having no employees.
* Having people give them money for nothing.
Anything beyond that is some horrific imposition on them that fatally impacts their fiscal stability...
Chas - The one, the only.
THANK GOD!!!
I run two small businesses, both in tech, not telecom, and I would shit myself with happiness if I made a 40 to 50 percent margin. I am content, competing, and making do with half that or less.
Next you'll be crying because you eat steak every day. GTFO and STFU.
Silence is a state of mime.
c'mon, I dare ya.
if this is supposed to be a new economy, how come they still want my old fashioned money?
If this is actually true, and carriers are not just being greedy then charge apple users more, don't sell a phone at $199, sell it at $399. That way apple makes their money and the carrier doesn't take the hit. Please stop asking android users to do not want a iphone to subsidize apple purchases. If they don't sell as well at $399 then apple can always come down on their price, but that is their hit, not the carriers, or the users. Done. That's call capitalism.
If Samsung can make a phone and sell it to a carrier at $300 bucks, and apple charges $600 for their phone, then charge the user the difference. Don't raise upgrade fees or data plans, since your markup is the same. Now if apple is trying to strong arm you into charging their user charging the same, while they still reap their profits, then tell them to go pound sand, and if apple lost lets say Verizon & at&t as carriers, then that will hurt them, and they will drop the price. Stop letting apple be a bully.
This is proof that there is no competition in Wireless. They are in Collusion.
AND to get me off my Grandfather Plan, they are going to have to offer something better than "higher prices and lower service". The problem is, I can't shop, as they all have about the same pricing now and it seems that nobody wants my business.
Oh, VZ just offered me $50 "loyalty" on upgrading. Um, hey VZ nice try. Here is a nice warm FUCK YOU
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
* Having people give them money for nothing.
They already have this one, its called 'text messaging'
Um, the barriers to entry for a wireless carrier are hardly artificial. They're limited by spectrum, a shared and extremely limited resource that they're granted a monopoly over by the government. That's why you can't just start up your own competing cell company, the spectrum is already allocated to the incumbents. That's why most countries regulate their cell providers, because the monopoly situation makes it impossible for proper competition to form. That's also why countries with lax regulation end up with sky high cell phone prices and poor service.
I read the internet for the articles.
That's just obscene!
It is almost as much as Apple's profit margin on the iPhone (around 50%)
So they have tv commercials advertising all the things you can do with the data and then they complain when you do.
Coder's Stone: The programming language quick ref for iPad
The company would be so much better if there weren't so many users!
As a AT&T customer I'm accustomed to being at any event - from stadium games and music festivals, having 4 bars and not being able to use the network. I guess I can understand because you never know where a stadium will pop up and when people might go there.
I remember Virgin Fest added capacity for Virgin Mobile, but everyone else was SOL.
Slashdot's rate-of-post filter: Preventing you from posting too many great ideas at once.
Having complained bitterly about cellular prices for years myself, it actually pains me greatly to say this... but here's the thing: AT&T and Verizon are just applying standard economic principles; continue to raise prices until you can make the profit you want while expending the least amount of resources (money, time, effort, etc.). The side effect of this is obviously that many people who want lower prices will go to the less "greedy" carriers, like Sprint or T-Mobile, (which I will most likely be doing myself, not too long after the next iPhone becomes available) but the profit loss from those customers departing the greedy carriers offset by the profit increase from the remaining customers... and the greedy carriers' network performance improves in the process. Then, if their net numbers fall too much, they still have the option to dial the crazy back down a bit. (Not that I think they will necessarily... but they could. In theory.)
It may be increasingly annoying to us consumers to have to deal with the ever-changing business models of these greedy-no-good-predatory-profiteering-duopolistic-carriers... but the unfortunate reality is: it really is "just business," and not greed, per se.
(And yes... I almost pressed delete on this whole blasted message when I started to think about how much some Slashdotters are going to hate this point-of-view... but the heck with my Karma. Sometimes, ya just gotta say it like it is.)
The solution to a limited spectrum allotment is to reduce broadcast power but increase the number of servicing towers.
Analogy:
Humans have small vocal chords. They can talk, and even yell to a large auditorium. They can effectively share the small hearing spectrum with 8 billion other humans globally, without resorting to licenses. They can do this, because their voices do not carry more than a dozen meters in normal practice. As such, two people talking, as long as there is sufficient isolation, does not pose a significant barrier to the communication.
Compare to Cellular Telephone:
A few important people with a megaphone YELL through the thing, and blanket an entire city. People have a hard time communicating because of the loud signal. The signal is loud to overcome the "noise" of all the private discussions. The government regulates the use of the spectrum, and says that only megaphone using humans, and humans with the appropriate communication licenses can now talk.
Better solution: Deploy smaller cells, but with greater density. The smaller cells can handle more direct data traffic, because they have wired infrastructure behind them. They service maybe 300 people tops, and cover about a quarter mile at the extreme. People using this service can expect more of the bandwidth available, because fewer people are jammed into it. Deploy these smaller cells with greater regularity. Health issues are considerably reduced due to the lower broadcast power. The cells do not interfere with each other because the signal falls into background just as the next tower's reception zone occurs. THIS IS THE WAY CELLULAR WAS DESIGNED TO WORK.
Stop telling me about "Oh, we dont have enough band!" Yes you do, you just arent using your band efficiently, because efficient use would require a greater infrastructure cost to implement.
Instead, you want "A small number of REAAAAAALY strong towers, that we jam *ALL* the customers onto, so we have fewer service points to take care of, have to buy less property, and can make more money!"
*THAT* is the problem.
Except that you have just defined an artificial barrier. The Monopolies on wireless spectrum are hardly needed. There is more than enough bandwidth within (for example) the 1.3ghz spectrum to allow for multiple channels over which wireless companies could operate. There is no need to lock out entire bands for a company that uses a fraction of that bandwidth.
Far better to use a single band for ALL cell communication and an encryption key standard that allows towers to communicate with any handset that performs the correct handshake. Combined with FHSS technology dropped calls would be a thing of the past, and we would free up massive piles of spectrum for public use.
(Also, if the 1.3 ghz band is not wide enough, there is plenty of room in the 2.7 and 3.7 ghz bands)
There is just no reason anymore to block out massive hunks of bandwidth. There should be ONE pool of bandwidth that can be used by ANYONE who wants to start a cell company. Make it rather wide if you must, but just one band. Just have a solid and extensible standard to follow and referee companies that use it so there are no abusers.
Official Heretic from the "Church of Global Warming". Proven right thanks to whistle blowers. AGW = Flat Earth Theory
Why not a tower (microcell) in EVERY home, provided by the carrier... along with fiber to the home.
And we could call it "WiFi"! That sounds catchy.
I'd have never thought corporate greed for profit could actually do a good thing in the long run. Darn it, I sound like a capitalism-apologist right there.
Capitalism isn't the problem; In a competitive market with many agents, there's market pressure to innovate; lower prices, more features, better reliability, etc. When you get a market like ours with only about 3 major players, that pressure goes away, and this is the result. The problem, is monopoly. And the solution is government-mandated breakup. But time and time again, it's been proven that the government here screws up telecommunications; they create the monopoly, then they break it up, then it reforms and becomes stronger. The problem is the government's laws, which create the conditions not only to create a monopoly, but also sustain and reinforce it. It's the same with all our utilities; Our electric grid is ailing... Electric plants aren't being built, and you can only buy from one provider in any given area. Hey look, costs are rising there. Sewers, water service, every last thing that creates a government monopoly goes to shit.
The message here is that infrastructure services simply can't be owned by private business. Capitalism is not a perfect solution to all economic situations.
#fuckbeta #iamslashdot #dicemustdie
Back in the day, our elite (and often inherited) ruling class had a sense of responsibility and duty to the public.
Today, the guys at the top do not consider themselves elite or a privileged ruling class. They're just out to make as much money for themselves as possible and get out while the getting is good. The key word is "stewardship". The old guys had it, new guys don't.
Excellent article on NY Times, no less (I would not have expected them to print something like this) :
http://www.nytimes.com/2012/07/13/opinion/brooks-why-our-elites-stink.html
"Wall Street firms, for example, now hire on the basis of youth and brains, not experience and character. Most of their problems can be traced to this."
Strongly suspect this is Google's endgame in their Fiber run. Once you've got 100Gbp, and all your neighbours too, why not allow the wifi module (also provided by Google) to share it out to nearby devices. Hangouts, Google voice, you could have an effective metropolitan wifi with ludicrous speeds.
Waiting for an amusing sig.
Why not a tower (microcell) in EVERY home, provided by the carrier... along with fiber to the home.
Heck, why not go one further and instead of making it a cell, just have the phone hardwired to it. It can even be powered by it. Then those crappy batteries won't keep dying on us. Plus since it is tied to the house, there is no need for everyone in the whole house to have one. I'm telling you, it's the wave of the future!
If you are not allowed to question your government then the government has answered your question.