Too Many Customers, Too Little Capacity

The problem with “rationing” OTA bandwidth is of course, pissing off a lot of customers, who pay monthly for data plans, with the expectation that their mobile internet experience will be seamless and responsive. Most probably AT&T problem isn’t unique, simply because operators throughout the world have a nasty habit of promising what they can’t deliver.

Like any other resource, OTA connectivity is limited. Stress the network with enough people, and you’ll have dropped connections, slow data transfers, and other common symptoms that have frustrated many data users. That’s because operators are under constant pressure to increase the number of subscribers, to show shareholders that they’re taking steps to grow the business. The problem is that, while snazzy marketing campaigns quickly add converts to an operator’s customer base, the same isn’t true for increasing capacity and infrastructure capability.

What’s Your Budget for Reliable Mobile Connectivity?

Thus my question: how much would you pay for reliable OTA bandwidth? How much are you willing to spend on a regular basis in return for mobile online access featuring reliability and speeds that truly rival wired services? Two times as much? Three times as much? The answer to that question is of course, subjective, but I’ve got no problems sharing my personal willingness to pay four times as much as current rates. In return however, I expect virtually no downtime, and a promise to refund for connection failures, prorated to the length of the downtime.

There are problems with my proposal: operators can simply claim users weren’t within an area with good network coverage (a traditional excuse they use to explain away network failures). And of course, you have shareholder pressure to boost the numbers.

But I still think it’s a good foundation for reforming the market, and something has to change. Operators should stop luring in customers with relatively low-priced data plans, then leave them hanging with poor service even before the ink on that two-year lock-in has dried. There a sound business reasons driving this approach, but it’s hardly a sustainable model.

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In retrospect, you just had to see it coming. The Google Voice iPhone app basically allowed free texts and much cheaper calls. That meant more money for carriers from data plans, but less profit from their traditional voice and SMS services.

It’s easy to point fingers at partner AT&T, as they’re the carrier with the most to lose if iPhone owners figure out how to send texts and do calls without adding to their monthly bill. And this is yet another way of limiting what subscribers can do for the sake of making more money.

Yet the whole brouhaha is also the fault of the App Store’s “walled garden”. That’s the setup that allows Apple to officially limit what iPhone owners can do—whether through its own initiative or under pressure from a partner—even after these customers have committed to a long-term investment to Apple’s product.

Sure, iPhone users can always jailbreak their phone. But why force paying customers to do something extra just so they can maximize their purchase? Just so they can do whatever they want with their gadget?

Source
Google Voice iPhone App screenshots courtesy iPhoneFreak

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If you really wanted an iPhone 3G but never wanted to adhere to the carefully cultivated Jobnesian smartphone setup (or you didn’t want to pay a massive extra for freedom), here’s your chance!

Through buy.com, you can get a “never-locked” iPhone 3G for only $200. The special label applies because this is a rare, fully-functional, and affordable unit that has never been jailbroken. It enjoys full support courtesy of Apple’s warranty, and will not break when new software updates are installed. Most importantly, being “never-locked”, the phone works with any network provider.

What are the catches? First and foremost, the $200 gets you a refurbed unit. It’s not brand-new. Also, from all indications, you still have to commit to a two-year plan from AT&T. Unfortunately, the offer is currently “temporarily sold out”, so it’s impossible to fully verify this offering.

Thanks Peter The Mordo Juan! Image courtesy of Apple Inc.

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$600 is a lot of money, and I’m not even sure if that price gets you full iPhone functionality. For instance, will Visual Voicemail run on other networks? To be sure, unsubsidized iPhones aren’t really new. The French and Germans required that their local counterparts also be available without any sort of lock-in.

Is the relatively high price worth it? Gearfuse implies that unsubsidized units free the user from the jailbreaking game, definitely a benefit worth considering. But I imagine bypassing Apple’s and AT&T’s restrictions will remain in vogue, so long as really good apps only work on jailbroken units.

(image and source: BGR)

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Look, I totally understand that AT&T has to make money. After all, putting up all that infrastructure isn’t cheap. But charging for phone-as-modem functionality is like charging users for using Bluetooth. Why ask people to pay for a feature that’s already built into the phone?

Even worse, Apple manages to get off without even so much as a complaint, if the comments on the source article are any indication. This is a manufacturer that decided to play along with a service provider’s unreasonable scheme people!

(image by sfgate.com)

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• The fact that AT&T is paying “about $300 per device”. No wonder the iPhone 3G is superficially cheap!
• The impression that the iPhone made the mobile web “dead simple”. Despite the existence of Nokia and it’s very capable MiniMap browser. But then again, you can’t argue with the results of effective marketing.
• Coverage of AT&T chairman and CEO Randall Stephenson, who is credited with AT&T’s cozy relationship with Apple. He’s been lauded as “all for wireless” and having the balls to sign up for what’s currently a “no-brainer” deal.

Surely, Apple’s and AT&T’s efforts to keep the phone locked have been good for the bottom line (which is what any company should push for anyway, just to be clear). But isn’t there a way to make money and “share the wealth”, so to speak?

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