AT&T indicated today that they plan to place tighter leashes on iPhone users who use excessive amounts of data for services such as streaming video. AT&T has had problems keeping up with increased wireless data usage since the release of the iPhone, leading to dropped calls and slower data connections. President and CEO of Mobility and Consumer Markets Ralph de la Vega indicated to investors that although AT&T is upgrading its network to cope with the increased data usage, the carrier also plans to give high-bandwidth users incentives to “reduce or modify their usage.” De la Vega did not provide any specific information on how or when the carrier would change its policies, but he did indicate that some form of usage-based pricing for data is inevitable.
Mr. de la Vega defended AT&T’s network performance, indicating that its 3G network is faster than its competitors overall, but that its major problems are concentrated in areas with higher densities of smartphone users such as New York and San Francisco, however he conceded that the current usage caps and lack of accessible usage information gives users little reason to limit their data usage and that AT&T needs to educate its customers to better understand data consumption and improve its systems to provide real-time access to data usage information. He also indicated that at this point it is approximately 3 percent of smartphone users who are consuming 40 percent of AT&T’s network capacity, with the most high-bandwidth activity being video and audio streaming to devices such as the iPhone.