You can push any tariff you like …
… as long as it’s flat!
Last week, AT&T’s CEO suggested that some customers were to blame for the poor performance of the AT&T mobile data network. With about 3% of smart-phone customers driving 40% of data traffic, AT&T is considering incentives to keep those subscribers from hampering the experience for everyone else. He then added “We’re going to focus on giving incentives to that small percentage of users to reduce or modify their usage.”
We recognize the need to deploy various measures such as data caps and/or speed controls to limit outright abuse. On the other hand, to be a broadband operator means that you are in a business where the name of the game is to handle a doubling of traffic every year without compromising quality, too much. Therefore, it’s a bit surprising that the emphasis seems to be on “incentives” to reduce the data usage for a group of customers who clearly are finding value in using mobile broadband services. For years operators have tried to fill their 3G networks, and now when they do and they realize that they are not really able to handle the traffic.
Mobile operators are not the only ones building broadband in the world. On the other side of the fence there is a very fast development of fixed broadband where 100Mbit/s is a pretty common offering to users, particularly in urban areas. If my iPhone is not working in my mobile network it will through WiFi work in my fixed network, where “femto cells” and usage are cheap.
We believe the AT&T case is a good indication of the enormous task mobile operators have ahead of them when it comes to being able to handle ever growing broadband traffic, real broadband traffic where tariffs are flat and usage is doubling, every year! And revenue growth won’t come from preventing usage but rather from accepting the above fact and instead focus on building capacity, nurturing innovation, milking the long tail and do what one does best – operate a mobile internet access network.