Tuesday, December 22, 2009

AT&T Hopes Wi-Fi Will Ease Network Woes

AT&T has, for fairly good reason, come under fire in regards to a woefully inadequate 3G network. Complaints are wide and varied but for the most part are centered around poor coverage, delays, and slow up/down speeds. AT&T's plan to deal with the issue, offer  "incentives" that would compel smartphone users, mainly those with iPhones, to switch to wireless Wi-Fi networks whenever possible.

AT&T hopes that by providing free Wi-Fi to iPhone subscribers through a series of partnerships that when iPhone users switch from 3G to Wi-Fi regularly, the strain on the network will be lessened. iPhone users use an estimated 60 percent of mobile web data, though they only have about a 24.7 percent smart phone market share (in a 36 million unit market) according to ComScore.

Cell towers get swamped when as few as a dozen nearby iPhone users simultaneously try to watch a YouTube clip or play a game. To prevent network swamping, AT&T plans to work with various companies such as McDonalds, Starbucks and the bookstore chain Barnes & Noble to give their users free access points to provide a cheaper faster alternative to the taxed 3G network.

Wi-Fi access points, which now days are found just about everywhere, move bits of information directly to and from a wired broadband Internet connection. That's cheaper and faster than transmitting the bits to and from a cell tower, as 3G does.

AT&T hasn't said how much traffic the company feels can be offloaded from its 3G network onto Wi-Fi networks but its clear they feel something has to be done.

In an interview with BusinessWeek AT&T Mobility President Ralph de la Vega said AT&T is looking at various ways to get these demanding users to curtail their consumption. Those remarks and a lack of immediate follow-up led many to believe that AT&T would inevitably move from its $30-a-month, unlimited data plan for iPhone users to a "tiered pricing" model that charges according to usage.

Many analysts believe this is just a case of AT&T not investing nearly enough to keep up with rising iPhone traffic. The company's overall capital spending is expected to drop to $17 billion this year, from $20.3 billion in 2008, although a spokesperson says the company has shifted "billions" of dollars to its wireless network.

My thoughts
For years the tide has been rising and the company has done nothing but set back and watched. They've pulled in tons of profits from the exclusivity contracts with Apple but haven't done as much as they should to strengthen their system. Now they want consumers to bear even more burden.

When the talk of tiered pricing was first making its waves I thought well good, if a consumer is using 4-5 times as much data as I am let them pay more. The problem there lies in the fact that AT&T forces high rate data plans on consumers. If I could be buy my iPhone, limit it to Wi-Fi and forgo the added monthly cost of an overpriced data plan I would. But AT&T won't do that, nor would they be likely to offer users that use less data cheaper plans.

AT&T and other wireless providers are doing their best to push smartphones, netbooks and other 3G connected devices. de la Vega himself says AT&T's network serves more than 24 million devices via its 3G network and they expect the addition of 2million more each quarter. If they can't handle demand now, after how many years of pushing smartphones at us. Then how are they going to handle it in 2010? 2011? 2012?

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