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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.
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.
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.)
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.
Now perhaps us iPhone users like our phones and actually use them more than android folks, but I don't think that's really the case.
Yet, it appears to be true
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."