AT&T warns 'data hogs' of higher prices
Smart phone users who like to watch videos or stream audio soon could be paying more for the privilege.
An executive at AT&T, the wireless carrier for the iPhone, told an investors conference Wednesday the telecom giant is planning a multi-tiered pricing system aimed at so-called “data hogs” who slow down the network.
The executive, Ralph de la Vega, did not specify when it would take effect or offer more details, but he said some kind of usage-based pricing is inevitable.
The idea is gaining traction in the industry, analysts said, as the explosion of smart phones has taxed mobile networks.
“People with smart phones were sold on the idea that they could use the Internet as much as they want,” said Noah Elkin, an analyst with eMarketer. “But as people are transferring bigger and more bandwidth-intensive content . . . (carriers) can’t build out their networks fast enough.”
De la Vega said 3 percent of AT&T users consume 40 percent of network capacity.
The company has been criticized for spotty coverage and de la Vega said it is upgrading its network, but major problems persist in New York and San Francisco, he said.
Some are not buying the company’s line that about data hogs.
“Blaming them for network congestion is actually an admission that (carriers) are uncomfortable with the 'all you can eat' broadband schemes that they themselves introduced,” telecom analyst Benoit Felton wrote in an online column last week. “The marketing push to get people to subscribe to broadband worked, but now the (carriers) see a missed opportunity at price discrimination.”