As I emerge from the MUNI subway at Market and Montgomery in downtown San Francisco, I fire up the NPR iPhone app to listen to the hourly newscast during my short walk to the office. The 3G mobile network struggles to maintain the downloaded stream.
This is not an isolated phenomenon; AT&T’s troubles in San Francisco and New York are well documented. Earlier this month, while speaking at the UBS 37th Annual Global Media and Communications Conference in New York City, Ralph de la Vega, CEO of AT&T Mobility and Consumer Markets, created a media firestorm by implying that smartphone users were to blame for AT&T’s network issues. De la Vega acknowledged the challenges faced by AT&T in response to the onslaught of data generated by iPhone and other smartphone users. He reported that just 3 percent of AT&T customers generate 40 percent of their wireless network data traffic, and in regions with high iPhone usage, i.e., New York and San Francisco, the network is not meeting current customer demand.
As an iPhone user in San Francisco, I can attest to AT&T’s findings and I welcome their effort to improve their local 3G network. The timing of de la Vega’s statement could not have come at a worse time as Apple and AT&T endeavored to sell iPhones during the holiday season and Verizon hounds AT&T in the mainstream commercial media. AT&T reports that their data usage has increased almost 5000 percent in the last three years. This is obviously a good problem to have, but one that puts a major strain on their network. Given the bravado with which Verizon is attacking AT&T, one wonders how Verizon’s network would handle a 50 fold increase in data. Both companies tout their plans to move to 4G, but for the foreseeable future 3G will handle the majority of traffic.
As AT&T struggles to improve its network, what seems to agitate consumers most is AT&T’s poor customer appreciation. De la Vega expressed AT&T’s desire to “educate” smartphone users on how much data traffic they generate. He continued that the purpose of educating his customers is to curtail usage, and if usage is not curtailed, AT&T will then provide “incentives” to alleviate the “problem.” To a consumer the approach is counterintuitive; create demand, provide poor service, spend millions on advertising boasting the best network and then strategize to curtail customer usage. Wouldn’t upgrading the network be a better solution? Granted it is a multi-billion dollar proposition, but it is no surprise to read that AT&T finished last in Consumer Reports’ recent ranking of top tier U.S. mobile carriers. If AT&T is unwilling or unable to meet their customers’ data demands with an “all you can eat” data plan, AT&T’s biggest challenge will be to reset customers’ expectations without aliening them.
Beyond their perceived need to educate users and encourage rationed data traffic, what worries me most about AT&T and other carriers is their taking a more direct approach by employing techniques to limit bandwidth or throttle throughput based on type or class of traffic. To read why in the full, in-depth article at our sister site, VON, click here or on the source link below.
Larry Golob is vice president of business development for San Francisco-based Global IP Solutions, which provides technology for processing real-time voice and video over IP networks.
