A key ingredient for infrastructure and new services investments by Service Providers is a sustainable overall business model, at least over a long run period. With mobile internet data usage absolutely soaring at AT&T (over %5000 during 3 years up to late 2009) together with unlimited data usage subscription revenues declining on a per user basis, something has had to give at some point. I’m pleased at this week’s business model news from AT&T, as an industry advocate of both investment for innovation and of sustainability.
The news is AT&T has announced it is discontinuing its offering of unlimited mobile data plans, moving back to a sustainable metering model with a limited amount usage included in the subscription and charging for usage over the limit during the billing cycle (wifi traffic is exempt, but I'm not sure about femtocell traffic). They are trying to put the unlimited data usage subscription “genie back in the bottle.” We shall see how AT&T’s competition respond, but I personally think this was a wise move—painful now, but important to do sooner than later before the Genie grew bigger, and the spirits of wireless net neutrality arrive in the form of solid legislation.
If the plans can survive, the improved business model AT&T is reestablishing for the US market will lead to more innovation in the long-run. One example idea would be of QoS-enabled mobile video (IPTV) products that are end-to-end managed by the retail mobile Service Provider and its partners, and separate from Internet data usage products and its meters.
On another note about AT&T, the news was not so good on its customer experience front. Threatening a customer with legal action because the customer persisted to contact the CEO is not a best practice for building brand value in a world of social networking. The quick apology by a Sr. VP certainly helps the recovery effort, but the social networks spread this story like wildfire, especially at a sensitive time.
Posted
06-03-2010 8:33 PM
by
Stephen Fleece