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Carriers Blame the iPhone For Data Caps and Increased Upgrade Fees

samzenpus posted about a year and a half ago | from the not-our-fault dept.

Iphone 272

zacharye writes "Bruised mobile carriers such as AT&T and Verizon are 'fighting back' against Apple's iPhone, despite the fact that the device has helped them eke out consistently higher average revenue per wireless subscribers since its launch. To hear the carriers tell it, the iPhone is a major inhibitor to their profits as last year they were 'only' generating wireless service profit margins in the 38% to 42% range. But ever since these beleaguered companies started 'fighting back' by implementing data caps, increasing fees for device upgrades and implementing longer waiting periods before users can switch devices, they’ve seen their wireless service profit margins surge. AT&T reported a 45% margin in Q2 2012 and Verizon reported a record-high 49% margin."

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272 comments

Victims of their own greed (5, Insightful)

Anonymous Coward | about a year and a half ago | (#40896567)

Anyone who spent 10 mintues with the iPad, and iPhone would realize they are enormous bandwidth hogs. You don't have to be a telcomm. engineer to see that video chat, and Netflix are killer apps. in terms of backhaul, spectrum and popularity.

They didn't plan properly, didn't spend appropriately and now they are punishing and blaming their users for using these devices exactly as they were designed.

Re:Victims of their own greed (5, Interesting)

Anonymous Coward | about a year and a half ago | (#40896657)

Which is why I will never upgrade and lose my unlimited data, and will try my hardest to go over the 2GB "recommended" usage every month. And since I'm on Verizon and they now need to remove the $20 per month tethering charge I will be tethering everything. For everyone saying I'm only hurting the other users, Verizon needs to upgrade their systems instead of claiming 50% profits, invest that in your damn infrastructure.

Re:Victims of their own greed (4, Informative)

KingSkippus (799657) | about a year and a half ago | (#40896709)

And since I'm on Verizon and they now need to remove the $20 per month tethering charge I will be tethering everything.

Removing the tethering charge does not apply to people on unlimited data plans. [zdnet.com] It's either/or. Either you get on one of their bandwidth-cap plans and have free tethering, or you continue to pay the fee for tethering. I'm not passing judgment on whether that's fair or not, just pointing it out.

Re:Victims of their own greed (3, Insightful)

ganjadude (952775) | about a year and a half ago | (#40896847)

I do not believe that to be entirely true

the 4g band cant have restrictions thanks to google, so while I can see them charging in 3g in 4g it should not be an issue from my understanding

Re:Victims of their own greed (-1)

Anonymous Coward | about a year and a half ago | (#40896899)

I don't think that Verizon offers an unlimited 4G plan, so the above commenter may be correct.

Re:Victims of their own greed (2)

AaronMK (1375465) | about a year and a half ago | (#40897037)

That depends. Verizon was recently fined for not adhering to open access provisions of their spectrum purchase. If he has a 4G LTE device ("C-Spectrum"), Verizon might be forced to allow free tethering regardless of his plan. The article to which you link reports Verizon "interpretation", which seems like they are still trying to dig their heels in, or continue to half-ass in their obligations with regard to the spectrum purchase. Whether that would survive if the FCC reviews Verizon's compliance again is a different story.

More likely, they will just find ways to force they unlimited customers into new contracts.

Re:Victims of their own greed (0)

cpu6502 (1960974) | about a year and a half ago | (#40897051)

>>>For everyone saying I'm only hurting the other users, Verizon needs to upgrade their systems

How do they do that when the EM spectrum is already close to full? Contrary to popular belief, their is not an infinite amount of room for data over the radiowaves.

Re:Victims of their own greed (1)

Githaron (2462596) | about a year and a half ago | (#40897163)

More towers with smaller broadcast domains?

Re:Victims of their own greed (-1)

cpu6502 (1960974) | about a year and a half ago | (#40897319)

How small? One tower for every two homes in order to raise the cap from 3GB to 100GB/month? At that point you might as well just skip the cellular internet, and go with fiber to the home.

You do not think large enough (2, Insightful)

SuperKendall (25149) | about a year and a half ago | (#40897431)

How small? One tower for every two homes in order to raise the cap from 3GB to 100GB/month?

Why not a tower (microcell) in EVERY home, provided by the carrier... along with fiber to the home. That would go a huge distance to alleviating the vast bulk of over the air network traffic and greatly reduce the need for new towers (new tower funds are where you would get the funds for giving microcells to every customer from).

Re:You do not think large enough (5, Funny)

thePowerOfGrayskull (905905) | about a year and a half ago | (#40897611)

Why not a tower (microcell) in EVERY home, provided by the carrier... along with fiber to the home.

And we could call it "WiFi"! That sounds catchy.

Re:Victims of their own greed (4, Interesting)

Xeranar (2029624) | about a year and a half ago | (#40897507)

the issue is without a visible spectrum map showing problem areas and times this argument over caps is a blatant money grab. They're playing on people's moral superiority complex and greed to protect their scam from being found out. Very few areas actually have real congestion, it's like rush hour traffic. But in this case building more lanes (I.e. more towers) is not cost prohibitive. Especially in urban areas where tall buildings can erect small towers this is a non-issue.

Re:Victims of their own greed (-1)

Anonymous Coward | about a year and a half ago | (#40897185)

But it's so much easier for the dumb end user to just demand more and not be satisfied until they get more.

I deal with the dumb fucked, "my computer is slow" all day long. Nine times out of ten, it's web page that won't load fast enough. Or an email that took 3 minutes to go through. Or perhaps an application took 3 seconds longer than normal to load because of some variable. These motherfuckers just complain and nothing is ever good enough.

Why can't they just "upgrade their systems?" D U M B F U C K S

Re:Victims of their own greed (0, Insightful)

Anonymous Coward | about a year and a half ago | (#40897373)

Which is why I will never upgrade and lose my unlimited data [...]

Hey, cool, good idea! Because you're an informed consumer who understands the issue of unlimited data and how it helps the-

[...] and will try my hardest to go over the 2GB "recommended" usage every month.

Oh. Because you're a spiteful asshole, bitter to the point of doing something, anything, just to brag about it on the internet and improve your hipster rating even if it doesn't do a single thing to help the situation. Gotcha. Glad that got that cleared up.

Re:Victims of their own greed (4, Insightful)

halltk1983 (855209) | about a year and a half ago | (#40896679)

Maybe they could work on deploying some more towers in high usage areas with that 49% profit?

Re:Victims of their own greed (0)

Anonymous Coward | about a year and a half ago | (#40896831)

Dear Stockholder,

Would you like to see your share of this quarter's profits as
        (a) a dividend check, or
        (b) a new tower in someone else's neighborhood?

Sincerely,
The Phone Company

Re:Victims of their own greed (5, Insightful)

wierd_w (1375923) | about a year and a half ago | (#40897075)

Dear Phone Company,

I understand that I am a vocal minority, and that most share holders are completely driven by liquid asset flow.

However, the construction of the towers in other people's neighborhoods is directly in line with my own interests in having a telephone company, and am able to see this as an investor.

Land that is serviceable for the installation of such infrastructure, especially in dense urban areas, is very scarce, and suffers a high price at market to develop. As such, the more you wait on installation, the more likely you are that a competitor will acquire the property, install the tower, and then remove that potential growth from this company's reach. As an investor, I want my investments to grow. That means spending some of the liquidity I expect to receive in my dividend cheque on growing the enterprise.

Please dont try to pump and dump investors by offering fat dividend cheques, and neglecting your infrastructure, only to then offer poor service, lose customers, and devalue the investments of my fellow investors.

As an informed investor, I prefer stable and reliable growth that factors in the costs of properly growing and maintaining the enterprise I have invested in. In short, Directors of the Phone Company, I am interested in the long term profitablility of the enterprise, and not the short term stock price. This is why I am drawing dividend cheques, and not day trading. Day traders are obcessed with fluid stock prices to game the stock trade system. I am a long term investor. I want stable investments in my 401k and other portfolios.

Please stop trying to claim that you are doing these things in my best interests, when it is blatantly obvious that these activities result in a poor quality of service from your enterprise, and drive away customers. This is clearly NOT in my interest as an investor.

Please build the damn towers, and do it before RivalCorp buys all the suitable properties.

Thank you.

Re:Victims of their own greed (0)

Anonymous Coward | about a year and a half ago | (#40897525)

You're an investor? Well FUCK YOU. You're the problem! There's no such thing as vocal minority.

Re:Victims of their own greed (5, Funny)

leonardluen (211265) | about a year and a half ago | (#40897095)

Dear Stockholder,

Please disregard the last message. We have instead decided to give this years profit as a big bonus to the CEO.

Sincerely,

The Phone Company

Re:Victims of their own greed (3, Insightful)

Xeranar (2029624) | about a year and a half ago | (#40897533)

Dear capitalism,

You've failed. Utilities should be publicly owned.

Signed,
The world at large.

Re:Victims of their own greed (4, Interesting)

Cinder6 (894572) | about a year and a half ago | (#40896857)

I'm all for hating on the telcos, but sometimes "just build more towers" is much, much easier said than done. For instance, it takes three years [techcrunch.com] to get one built in San Francisco. Granted, not every place is as downright insane as San Francisco is, but it's worth mentioning.

Re:Victims of their own greed (0)

Anonymous Coward | about a year and a half ago | (#40896953)

Yeah, they also have to deal with antitrust issues every time they try to buy more spectrum.

Re:Victims of their own greed (5, Insightful)

Anonymous Coward | about a year and a half ago | (#40897137)

Don't tell me about the pain, just show me the baby.

If I'm late on my bill, does the phone company care why? Having been broke before I assure you they do not. I reciprocate by not caring at all why it is so hard for them to conduct their business, I care only for the benefits that accrue to me.

Re:Victims of their own greed (0)

Anonymous Coward | about a year and a half ago | (#40897425)

Simple solution, pull the working towers in places that the "approvers of the red-tape" work/live, and add those into the project, it will be approved much faster.

Re:Victims of their own greed (1)

Xeranar (2029624) | about a year and a half ago | (#40897571)

Anecdotal evidence is anecdotal?

Know why that's news? Because it's not normal. Regardless the nationwide pricing scheme is a failure as well if we're going to argue cellular placement on the regional level.

Re:Victims of their own greed (1)

alen (225700) | about a year and a half ago | (#40897153)

will more towers work? i was at the beach last month and my iphone was SLOW. i look around and every other person has a smart phone.

that's a lot of devices broadcasting on the same frequencies and made me think. wireless is like the old Layer 1 hubs. even if you factor in slightly different frequencies you phone is still filtering out the ones its not supposed to be listening on. you can add more towers in higher density locations but it won't do much good since everyone will still be broadcasting on the same frequencies and "hitting" your phone as well. adding an extra tower near a stadium still means that thousands of people are broadcasting in range of your phone

Yes more towers work (1)

SuperKendall (25149) | about a year and a half ago | (#40897379)

For really large events (like South by Southwest), the phone companies often bring in microcells - those REALLY work, simply by moving devices on to more towers.

Phones are not all on the exact same frequency at the same time... there is a range they communicate over.

Re:Victims of their own greed (5, Informative)

fahrbot-bot (874524) | about a year and a half ago | (#40897577)

i was at the beach last month and my iphone was SLOW. i look around and every other person has a smart phone.

Hmm... Seems you and the others were using the beach wrong. Not trying to judge, but put down the phone and enjoy the surf, sand and sun.

Re:Victims of their own greed (1)

AaronMK (1375465) | about a year and a half ago | (#40897597)

I don't buy this "can't be done do to the nature of wireless communications" explanation. It's not because I completely understand the technical details (far from it), but because I have been to very densely populated places with high penetrations of "smart" devices", that have cheap mobile data, which their usage reflects, and got consistently great performance. I have video Skyped half way around the world on a GSM network (not even "4G"), with people doing other data heavy tasks all around me without performance issues.

Now, it may come down to politics and very real problems when managing our spectrum, getting permission to build and "wire" for mobile communcations, etc, but it being technically impossible for mobile networks to handle "high" data demands? I think not.

Re:Victims of their own greed (0)

Anonymous Coward | about a year and a half ago | (#40897487)

Maybe they could work on deploying some more towers in high usage areas with that 49% profit?

What?!? Are you insane? Look at that: 49% profit margin! 49%! That's a whole 51% of potential profits that are rightfully theirs that are leaking out to the little people! Some of those people don't even have private jets! They even have to fly coach! I mean, can you imagine a world where those people were to benefit from the telcos' God-given profits? It'd be chaos!

Re:Victims of their own greed (4, Interesting)

DrgnDancer (137700) | about a year and a half ago | (#40897195)

Well ya see, it's like this. The carriers had been selling smartphones with data plans for years before the iPhone, and it was a great deal. People spent $20-30 extra every month, but rarely went out the of 10s of megabytes for traffic. Because those phones pretty much sucked for everything other than e-mail, contacts and calendaring. The browsers were terrible, and network aware apps were a rarity or so hard to use that no one did (I remember trying to do ssh on my Treo, it was awful). Then those damned iPhones came out, and shortly thereafter those stupid Android phones. Suddenly networking on phones actually worked. The browsers could deal intelligently with websites, networked apps actually worked, people were using smartphones to actually access the data plans they had paid for. The nerve! They actually used what they bought instead of just paying for it and passively consuming a small part of their purchase.

So you can totally see how it's all the iPhone's fault. Those assholes at Apple and Google made tools that people actually wanted to use. Why couldn't they just follow the status quo and network aware crap that allows the carrier to charge more, but not spend anything?

Re:Victims of their own greed (0)

Anonymous Coward | about a year and a half ago | (#40897383)

Anyone who spent 10 mintues with the iPad, and iPhone would realize they are enormous bandwidth hogs. You don't have to be a telcomm. engineer to see that video chat, and Netflix are killer apps. in terms of backhaul, spectrum and popularity.

Do these bandwidth hogs of Netflix, video chat, etc not exist on Android based handsets? I know that's not the emphasis of your point but you'd have been better served saying just about any modern smartphone or tablet. Esp since Android supposedly has more activations that Apple.

US problem, not the iPhone (4, Informative)

Pieroxy (222434) | about a year and a half ago | (#40896581)

In other news, in other parts of the world, some carriers just do manage their infrastructure correctly and the prices are actually going down instead of going up.

So please, stop blaming the customers and start rethinking your now-stinking strategy.

Hmm...Huh...? (1, Funny)

nashv (1479253) | about a year and a half ago | (#40896649)

They're discouraging the iPhone?

I'd have never thought corporate greed for profit could actually do a good thing in the long run. Darn it, I sound like a capitalism-apologist right there.

Re:US problem, not the iPhone (0)

Anonymous Coward | about a year and a half ago | (#40896719)

Whats the bulk data flow that the carriers carry? Lets have a telecom olympics and see who can provide the best service, or... I mean... make the most possible profit for the big telecoms. Thats why we are here anyways.

Re:US problem, not the iPhone (5, Insightful)

wierd_w (1375923) | about a year and a half ago | (#40896739)

(sarcasm)

There is NOTHING wrong with the strategy! It will make us BILLIONS! You stinking customers just aren't responding to our offerings IN THE CORRECT WAY!

Simply because we provide a bandwidth hungry digital communication platform, that basically embodies excess, wealth, and high standards of living-- then turn around and shamelessly state that you CAN watch streaming video over our BLAZING FAST network, does NOT IN ANY WAY imply that we actually WANT you little wage slaves to actually USE the devices in that fashion!

Is it so hard for you to consume THE WAY WE WANT you to!? Really, we have a lot of money on the line here! Dont you care about the economy!?

(/sarcasm)

Re:US problem, not the iPhone (0)

Anonymous Coward | about a year and a half ago | (#40897495)

Exactly. I see Huawei being able to handle the large traffic growth without whining.

Japan, South Korea? Same. Their cellphones can also run TV in real time.

Then we look at what some call "banana republics". Chile and Brazil are getting excellent cell phone networks. Their providers don't complain, they lay fiber.

Of course, there is Europe.

The only thing increasing here in the US are fees, and instead of doing like every single telco is doing worldwide, here they wring their hands in front of Congress begging them to keep their paying customers at bay.

Re:US problem, not the iPhone (1)

butchersong (1222796) | about a year and a half ago | (#40897623)

Yeah seems more like a problem of lack of real competition or... a kind of de facto collusion between carriers. A 45% profit margin? Most companies I've worked with operate between 10-15 percent in good years.

why are american corporations so incompetent? (1)

Anonymous Coward | about a year and a half ago | (#40896639)

what kind of horseshit do they teach at harvard business school anyways? fuck.

Re:why are american corporations so incompetent? (5, Insightful)

wierd_w (1375923) | about a year and a half ago | (#40896675)

American CEOs live by the Golden Parachute philosophy:

Attain a high level position on the board, if not the CEO chair itself.

Enact short sighted, but highly lucrative policies for the short term.

Rack up a HUGE "profit".

BAIL! BAIL! BAIL!

Eject from the burning enterprise as it crashes into insolvency, and deploy the golden parachute.

Majestically float into the next board meeting at the next fortune 500 corporation.

Re:why are american corporations so incompetent? (0)

Anonymous Coward | about a year and a half ago | (#40896977)

You forgot to add anyone in the American so called representative government. I personally liked it better when I had my data plan on my rotary phone, it was dirt cheap.

Re:why are american corporations so incompetent? (1)

TheDarkMaster (1292526) | about a year and a half ago | (#40897439)

And the interesting part... This process Is like a scam scheme, but the investors from the target companies still trust in this golden parachutes CEOs, even knowing what he did with the previous victim.

Re:why are american corporations so incompetent? (2)

White Flame (1074973) | about a year and a half ago | (#40896765)

Buy congresscritters to ensure your market position. There's no way profit margins would remain anywhere at this level, for this popular of a service, if the artificial barriers to entry for competition weren't continually legislated so high over here. Investors would be jumping over themselves to establish a smaller margin business model and undercut the incumbents.

Re:why are american corporations so incompetent? (4, Informative)

jandrese (485) | about a year and a half ago | (#40896961)

Um, the barriers to entry for a wireless carrier are hardly artificial. They're limited by spectrum, a shared and extremely limited resource that they're granted a monopoly over by the government. That's why you can't just start up your own competing cell company, the spectrum is already allocated to the incumbents. That's why most countries regulate their cell providers, because the monopoly situation makes it impossible for proper competition to form. That's also why countries with lax regulation end up with sky high cell phone prices and poor service.

Re:why are american corporations so incompetent? (3, Insightful)

wierd_w (1375923) | about a year and a half ago | (#40897259)

The solution to a limited spectrum allotment is to reduce broadcast power but increase the number of servicing towers.

Analogy:

Humans have small vocal chords. They can talk, and even yell to a large auditorium. They can effectively share the small hearing spectrum with 8 billion other humans globally, without resorting to licenses. They can do this, because their voices do not carry more than a dozen meters in normal practice. As such, two people talking, as long as there is sufficient isolation, does not pose a significant barrier to the communication.

Compare to Cellular Telephone:

A few important people with a megaphone YELL through the thing, and blanket an entire city. People have a hard time communicating because of the loud signal. The signal is loud to overcome the "noise" of all the private discussions. The government regulates the use of the spectrum, and says that only megaphone using humans, and humans with the appropriate communication licenses can now talk.

Better solution: Deploy smaller cells, but with greater density. The smaller cells can handle more direct data traffic, because they have wired infrastructure behind them. They service maybe 300 people tops, and cover about a quarter mile at the extreme. People using this service can expect more of the bandwidth available, because fewer people are jammed into it. Deploy these smaller cells with greater regularity. Health issues are considerably reduced due to the lower broadcast power. The cells do not interfere with each other because the signal falls into background just as the next tower's reception zone occurs. THIS IS THE WAY CELLULAR WAS DESIGNED TO WORK.

Stop telling me about "Oh, we dont have enough band!" Yes you do, you just arent using your band efficiently, because efficient use would require a greater infrastructure cost to implement.

Instead, you want "A small number of REAAAAAALY strong towers, that we jam *ALL* the customers onto, so we have fewer service points to take care of, have to buy less property, and can make more money!"

*THAT* is the problem.

Re:why are american corporations so incompetent? (4, Interesting)

d3ac0n (715594) | about a year and a half ago | (#40897361)

Except that you have just defined an artificial barrier. The Monopolies on wireless spectrum are hardly needed. There is more than enough bandwidth within (for example) the 1.3ghz spectrum to allow for multiple channels over which wireless companies could operate. There is no need to lock out entire bands for a company that uses a fraction of that bandwidth.

Far better to use a single band for ALL cell communication and an encryption key standard that allows towers to communicate with any handset that performs the correct handshake. Combined with FHSS technology dropped calls would be a thing of the past, and we would free up massive piles of spectrum for public use.

(Also, if the 1.3 ghz band is not wide enough, there is plenty of room in the 2.7 and 3.7 ghz bands)

There is just no reason anymore to block out massive hunks of bandwidth. There should be ONE pool of bandwidth that can be used by ANYONE who wants to start a cell company. Make it rather wide if you must, but just one band. Just have a solid and extensible standard to follow and referee companies that use it so there are no abusers.

Re:why are american corporations so incompetent? (1)

cvtan (752695) | about a year and a half ago | (#40897085)

This is why we need a corporate-type to be president. Business schools are a bottomless pit of managerial competence. Just look at Kodak...err

Re:why are american corporations so incompetent? (1)

AaronMK (1375465) | about a year and a half ago | (#40897307)

what kind of horseshit do they teach at harvard business school anyways? fuck.

Obviously the kind of horseshit that enables a company like Verizon to maintain a 40 - 50 percent profit margin on their customers.

American corporations are not incompetent. Many are making record profits in one of the worst economic downturns in recent history. They know what they are doing, especially when it comes corrupting our government for their benefit and locking in customers. Deserving of eternal damnation, yes. Incompetent, no.

Who'd a thunk it? (4, Insightful)

93 Escort Wagon (326346) | about a year and a half ago | (#40896645)

With the iPhone and Android devices, people find them useful enough to - gasp! - actually USE mobile data allotments!

I can see why AT&T and the other carriers were caught off guard there.

38% profit margin? (2)

kilodelta (843627) | about a year and a half ago | (#40896653)

That's just obscene!

Re:38% profit margin? (4, Insightful)

Anonymous Coward | about a year and a half ago | (#40896727)

Which part is obscene? That they make a 38% profit margin or that it's not enough for them? To me it's a toss-up.

Re:38% profit margin? (0)

Anonymous Coward | about a year and a half ago | (#40896813)

mr=mc. You think that rocking subsidy you got was 'free'? Not to the carrier...

Re:38% profit margin? (4, Informative)

Anonymous Coward | about a year and a half ago | (#40897015)

That's just obscene!

It is almost as much as Apple's profit margin on the iPhone (around 50%)

Awwww (1)

kiriath (2670145) | about a year and a half ago | (#40896673)

Poor carriers.

I for one can't wait for the day when a Star Trek style communication system is the norm and companies can't gouge your arses with fees and extraneous charges just because they feel like it.

Blame The Customers Business Model (5, Insightful)

Kozar_The_Malignant (738483) | about a year and a half ago | (#40896717)

The carriers went to great pains to advertise all of the bandwidth-hogging things you can do with their phones, such as video chat, streaming movies etc. Now that their ad campaigns have proven successful and people are actually doing all those things, the carriers find that they cannot hold up their end of the bargain. Their solution to this problem is to blame their customers for using what they were sold.

They need to put some of those profits into improving their infrastructure so they can deliver what they sold. An awful lot of businesses would be very happy with profit margins half of what these guys are getting.

Re:Blame The Customers Business Model (0)

Anonymous Coward | about a year and a half ago | (#40896827)

Our cell phone bills these days are more than a typical utility bill, minus electricity. Once these companies can fit a meter to our wallet, they won't have any incentive to change. They have plenty of profit avialable to upgrade their infrastructure at bottleneck points. I feel like some of it should actually be cheaper for the consumer, they are making plenty in the long haul to more than cover the actual cost of what you actually use plus a hefty profit.

Re:Blame The Customers Business Model (5, Insightful)

JWW (79176) | about a year and a half ago | (#40896887)

Yeah, I still watch all the "get blazingly fast 4G" adds thinking that they should be forced to include disclosures like are required on drug adds.

"using AT&T's 4G service at full speed for 30 minutes will surpass the subscriber's bandwidth cap."

"Watching a movie over 4G is not recommended as none of our data plans cover that amount of data."

Re:Blame The Customers Business Model (0)

Anonymous Coward | about a year and a half ago | (#40897165)

the carriers find that they cannot hold up their end of the bargain.
 
Oh, they can, they just won't. It's like when our fine leaders try to pass legislation when the current legislation isn't enforced. They make it sound like there is a problem but they don't even try to apply the solution, they use it as justification to go on another money/power grab.

The only ones to blame... (1)

Anonymous Coward | about a year and a half ago | (#40896723)

are the telecoms themselves. If they put some of their "profits" into upgrading their networks, and making them more efficient, they wouldnt have bandwidth problems. This is where capitalism/greed fails. Companies feel they have to pus shareholders first, instead of customers.

The saying "the customer is always right" has morphed into "the shareholder comes first".

End shareholder dominance and you end customer sacrifice.

CANCEL your smartphone accounts and go to pay-as-you-go accounts, which will kill the telecoms profits and force them to bow to customer demands.

CUSTOMERS should come first not shareholders.

Re:The only ones to blame... (1)

nighthawk243 (2557486) | about a year and a half ago | (#40897007)

Ditto. I have always run pre-paid (even with a smart phone... I'm on a Galaxy Nexus currently). Post-paid just seems about as much fun as wiping one's ass with a cactus.

Re:The only ones to blame... (1)

rickb928 (945187) | about a year and a half ago | (#40897323)

"CANCEL your smartphone accounts and go to pay-as-you-go accounts, which will compel the telecoms to maintain their profits by capping data usage and increasing fees on those plans,and give them another way to avoid bowing to customer demands."

There, fixed that for ya.

Like you think you can win this.

The problem is the carriers. Not the equipment. (4, Insightful)

Chas (5144) | about a year and a half ago | (#40896735)

These ass clowns could have money shooting from every available orifice, on-demand and in any denomination they desire (Including Berkshire-Hathaway Class A stock), and STILL they'd complain that their revenues were impacted.

Basically they're using the following formula:

100% profit is:

* Not actually having a service to keep running/support/etc.
* Having no employees.
* Having people give them money for nothing.

Anything beyond that is some horrific imposition on them that fatally impacts their fiscal stability...

Re:The problem is the carriers. Not the equipment. (3, Funny)

rokstar (865523) | about a year and a half ago | (#40896929)

* Having people give them money for nothing.

They already have this one, its called 'text messaging'

Cry me a river you fucking babies (5, Insightful)

wbr1 (2538558) | about a year and a half ago | (#40896741)

I run two small businesses, both in tech, not telecom, and I would shit myself with happiness if I made a 40 to 50 percent margin. I am content, competing, and making do with half that or less.
Next you'll be crying because you eat steak every day. GTFO and STFU.

Re:Cry me a river you fucking babies (1)

afidel (530433) | about a year and a half ago | (#40897209)

Yep, my dad's small business absolutely LOVES his accounts with a gross 40% margin. Like you his average is probably half that.

Charge Apple Users More then (3, Insightful)

GeXX (449863) | about a year and a half ago | (#40896803)

If this is actually true, and carriers are not just being greedy then charge apple users more, don't sell a phone at $199, sell it at $399. That way apple makes their money and the carrier doesn't take the hit. Please stop asking android users to do not want a iphone to subsidize apple purchases. If they don't sell as well at $399 then apple can always come down on their price, but that is their hit, not the carriers, or the users. Done. That's call capitalism.

If Samsung can make a phone and sell it to a carrier at $300 bucks, and apple charges $600 for their phone, then charge the user the difference. Don't raise upgrade fees or data plans, since your markup is the same. Now if apple is trying to strong arm you into charging their user charging the same, while they still reap their profits, then tell them to go pound sand, and if apple lost lets say Verizon & at&t as carriers, then that will hurt them, and they will drop the price. Stop letting apple be a bully.

Re:Charge Apple Users More then (1)

Anonymous Coward | about a year and a half ago | (#40896863)

Like android devices don't suck bandwidth. Any smartphone will if it's actually used. Now perhaps us iPhone users like our phones and actually use them more than android folks, but I don't think that's really the case.

Why won't AT&T spend the damn money they're charging us to upgrade their infrastructure. They got money from the gov't in the 90s to upgrade their wired network and ignored that too. Now we've got a telco that can't compete on wired or wireless because they're too cheap to upgrade. It's their own fault and my iPhone gets blamed for it.

I have no problem with REASONABLE data caps, but what they do is crap. I use a little under 2Gb of data a month on my iPhone and that's because i can't use wifi at work and my email is huge. It's not me, it's them.

Re:Charge Apple Users More then (-1, Flamebait)

oh_my_080980980 (773867) | about a year and a half ago | (#40896873)

Hey douche bag, they are making 38% to 42% profit margins not 45% where they would like. Their complaint is that they need to actually invest in their infrastructure which lowers their profit margins.

Re:Charge Apple Users More then (1)

GeXX (449863) | about a year and a half ago | (#40897371)

Part of the issue is apple charges so much more for their hardware, but sells it at the same price as the android OEM pricepoint. The carrier data costing more is just pure greed from the carries, the subsidizing of hardware is a apple being greedy issue.

Apple probably does what they do with everything else, which is, if you want to sell to our customers, then you the (carrier, developer, book publisher) whomever are going to take the hit, and like it, you cannot sell our product higher than your competitor, even if they aren't asking for their cut. Ex a app on the ios market cannot cost more than android, even though apple is taking more of the developers cut. The same thing happens with the phone. Apple is charging the carrier lets say 400-600 bucks for the phone, where samsung, htc, motorola, or whomever is charging them 100-300 (using rough numbers), but the carrier is selling them both at $199 or $299, so the carrier is covering a larger part of apple's chunk and not passing the difference off to the consumers, then raising everyone's price to pay for apple's bank account padding, then tells the carrier, if you want our phone, it can't be priced more than the phone that you are buying for 1/2 the price, or we won't sell to you, hence the bullying.

Re:Charge Apple Users More then (0)

Anonymous Coward | about a year and a half ago | (#40897003)

Apple is a bully, because it has a large market share and a lot of dedicated customers. Charge $399 for it? Apple will stop selling on your carrier. You will bleed subscribers and the overall profitability will go down more than the extra money you make on the more expensive Apple phones.

What do they call termination fees? (1)

damn_registrars (1103043) | about a year and a half ago | (#40896833)

I always figured termination fees would come in at close to 100% profit, as it takes less than 10 minutes of an employee's time to cancel a contract (and the employee is paid terribly so those 10 minutes are trivial in comparison to the fee itself). Considering Verizon and - to a lesser extent - AT&T are masters of the termination fees, I would think their profit margins would actually be higher than what was stated in the summary.

Re:What do they call termination fees? (0)

Anonymous Coward | about a year and a half ago | (#40897189)

Termination fees exist to make up for the phone subsidy. If you buy an iPhone from Verizon for $200, you're getting it for several hundred dollars below Verizon's cost. Part of your monthly fee goes to paying off the phone. If you cancel your contract early, the termination fee pays off the balance on your phone.

Wait...what? (1)

Anonymous Coward | about a year and a half ago | (#40896875)

Why is this focused on iDevices? Aren't these the same carriers keep touting their Android handset sales numbers? I really don't believe there's any case to be made that the Android devices and the apps that run on them don't use proportionate bandwidth to their counterpart iDevices.

So, this must be in part about their higher profit margin on said Android devices, no? That, and their fee-grabbing greed regarding any use of their network. ...first ones against the wall when the revolution comes....

Proof! (4, Insightful)

Archangel Michael (180766) | about a year and a half ago | (#40896877)

This is proof that there is no competition in Wireless. They are in Collusion.

AND to get me off my Grandfather Plan, they are going to have to offer something better than "higher prices and lower service". The problem is, I can't shop, as they all have about the same pricing now and it seems that nobody wants my business.

Oh, VZ just offered me $50 "loyalty" on upgrading. Um, hey VZ nice try. Here is a nice warm FUCK YOU

Re:Proof! (1)

Creepy (93888) | about a year and a half ago | (#40897351)

They were a collusion to begin with, but people seem to miss that and call it Verizon and not by the joint venture name of Verizon Wireless. Verizon Wireless is a joint venture between Vodafone (45%) and Verizon (55%) corporations, and its legal name is Cellco Partnership d.b.a. Verizon Wireless (d.b.a=doing business as), but essentially they are two giant telecoms that agreed to work together so they could dominate the bidding wars for best bandwidth and then reap the profits (which IMO is collusion). If you mean the competition is price fixing, I agree with you on AT&T and Verizon Wireless, not sure about others, yet.

Insufficient competition... (0)

Anonymous Coward | about a year and a half ago | (#40896883)

When companies become actively hostile to their customers, it's generally a sign that there isn't enough competition in the marketplace.

Translation (1)

Bill_the_Engineer (772575) | about a year and a half ago | (#40896891)

Since they can't hide their crappy data service with a handset that makes the consumer not want to use it, they are forced to create artificial barriers to act as a facade for their crappy connectivity.

BS (0)

Anonymous Coward | about a year and a half ago | (#40896907)

They may be bandwidth hogs, but it's still BULL SHIT!

NEWSFLASH (0)

Anonymous Coward | about a year and a half ago | (#40896937)

Raising prices/cutting services raises profits. Film at 11....

Pay people to text (0)

Anonymous Coward | about a year and a half ago | (#40896995)

How about offering a plan that pays people to text instead of making calls? I've never understood why consumers should pay to send texts. Texts uses far less bandwidth than voice and can be send in bursts during bandwidth utilization lulls. Maybe texts are just so lucrative that no one wants to shoot the golden goose, but SOME company should be trying to attract customers with a "we'll pay you to text" plan.

Sustainable? (2)

MobileTatsu-NJG (946591) | about a year and a half ago | (#40897011)

But ever since these beleaguered companies started 'fighting back' by implementing data caps, increasing fees for device upgrades and implementing longer waiting periods before users can switch devices, theyâ(TM)ve seen their wireless service profit margins surge

When AT&T started arbitrarily throttling unlimited data users I immediately dropped the 2 gig data plan I had for my iPad. When they decided to enact the 3 gigabyte throttling standard for unlimited users, but would not state the minimum speed these users will get, I decided I will not renew my contract on the unlimited data plan I have with my phone. Unfortunately I still have an expensive ETF, so I will wait until the contract is up.

I'm curious if this profit margin will still be this high in the next two years when people's contracts run out. I'm willing to bet that in the next five years AT&T and Verizon will be running Sprint'esque ads with the CEO saying "we want you back! *sniffle*". (It is an amazing coincidence that Sprint is the one still offering properly unlimited data right now...)

Consolidators? New market for Apple? (0)

Anonymous Coward | about a year and a half ago | (#40897039)

I seem to recall (around '05) that the future cellular market was in Consolidators, like USCellular. (Companies that own no towers, but resell bulk-purchased access to end users. Shades of MCI...) Admittedly, this was just prior to the Smart Phone, so things might've changed just a bit.

Point here is: Perhaps Apple outta get into the market in the same way those Consolidators were: buy up a boat load o' access, then resell it to us. Tell ya what, the telcos have jumped the shark: I'd pay for an unsubsidized NEW phone as long as it was accompanied by a new paradigm. (EG: "Caller pays" like the rest of the world; transparency, net-neutrality, and one single data-miner of my activities with a hope-in-hell of a privacy policy, to name a few.)

Re:Consolidators? New market for Apple? (1)

nighthawk243 (2557486) | about a year and a half ago | (#40897067)

There are still MVNOs. Straight Talk (owned by TracFone) is a well known one for the GSM phones that run on the AT&T and T-Mobile bands.

Commericals (4, Insightful)

slapout (93640) | about a year and a half ago | (#40897057)

So they have tv commercials advertising all the things you can do with the data and then they complain when you do.

Usage based pricing is fair (0)

Anonymous Coward | about a year and a half ago | (#40897059)

I've no problem with bandwidth caps or the concept of usage based pricing. If the real bandwidth hogs are stretching the system beyond capacity it makes sense to restrict them.

The trouble here is where the benefits of such an approach haven't been fed back to the end user as lower costs, but instead have been taken by the telecoms firms as increased profit.

The cost of cell phone plans in the US is outrageous. And knowing how much they can make from a punter with a smart phone, the carriers offer next to no low cost provision for users with dumb phones or those with smart phones that have frequent access to wifi and only need a few hundred MB of data a month,

Now they do this with tablets as well. If you have an iPad, Vodafone UK charge less than $5 a month for 250MB of data. AT&T in the US want tree times as much, $14.99

Fawlty Towers (5, Insightful)

scorp1us (235526) | about a year and a half ago | (#40897063)

The company would be so much better if there weren't so many users!

As a AT&T customer I'm accustomed to being at any event - from stadium games and music festivals, having 4 bars and not being able to use the network. I guess I can understand because you never know where a stadium will pop up and when people might go there.

I remember Virgin Fest added capacity for Virgin Mobile, but everyone else was SOL.

Larger net on smaller gross (5, Insightful)

zarmanto (884704) | about a year and a half ago | (#40897133)

Having complained bitterly about cellular prices for years myself, it actually pains me greatly to say this... but here's the thing: AT&T and Verizon are just applying standard economic principles; continue to raise prices until you can make the profit you want while expending the least amount of resources (money, time, effort, etc.). The side effect of this is obviously that many people who want lower prices will go to the less "greedy" carriers, like Sprint or T-Mobile, (which I will most likely be doing myself, not too long after the next iPhone becomes available) but the profit loss from those customers departing the greedy carriers offset by the profit increase from the remaining customers... and the greedy carriers' network performance improves in the process. Then, if their net numbers fall too much, they still have the option to dial the crazy back down a bit. (Not that I think they will necessarily... but they could. In theory.)

It may be increasingly annoying to us consumers to have to deal with the ever-changing business models of these greedy-no-good-predatory-profiteering-duopolistic-carriers... but the unfortunate reality is: it really is "just business," and not greed, per se.

(And yes... I almost pressed delete on this whole blasted message when I started to think about how much some Slashdotters are going to hate this point-of-view... but the heck with my Karma. Sometimes, ya just gotta say it like it is.)

Re:Larger net on smaller gross (0)

Anonymous Coward | about a year and a half ago | (#40897565)

IMHO, legitimate businesspersons want to make as much profit as possible, but also want to make their customers happy. They don't have a brick wall at the end of the quarter that they can't see past. They invest in their business and generate goodwill with customers because they know that this will help their business thrive, grow, and handle the hard times.

good post (-1)

Anonymous Coward | about a year and a half ago | (#40897261)

my friend's step-sister earned $13840 a week ago. she been making cash on the internet and got a $571500 house. All she did was get blessed and profit by the information written on this link http://qikr.co/7nn9m

iphone porn is the real culprit here (1)

cod3r_ (2031620) | about a year and a half ago | (#40897279)

Why don't they just come out and call a spade a spade. It's all the porn that's being watched and downloaded on said devices that's causing the problems.

Multi-tier wireless business model? (2)

swb (14022) | about a year and a half ago | (#40897285)

The current political and business climate would never allow for this, but would it ever make sense to run the infrastructure side of wireless as a highly regulated public utility, in the manner of electric utilities (ie, basically give them a fixed, 15% pricing margin, regulated by a board with public meetings and documentation).

But have these entities only sell wireless "service" to the actual resellers, which would act as the carriers generally do now in terms of selling wireless services to users.

The infrastructure side would simply be a fixed-profit business, with maintenance, network costs, tower expansion, etc all built into the business model up front, along with regulatory requirements that would require that wireless and backhaul capacity be mandated to maintain X% overhead. Actual technologies could then be regulated as well, so that all towers used the same wireless technology so that any phone from any "wireless reseller" would work, with no network lockout.

The wireless retail sellers would then be competing on actual customer service and business efficiency, since wireless data volumes/minutes would be sold at a regulated price at the wholesale level and there would be no technology lock-in (eg, CDMA vs. GSM vs. HSPA+ vs. LTE, etc).

You would still have innovation in the industry in terms of handset hardware and the resellers would not have any way to manipulate pricing (ie, starve capital investment for short-term profit, then jack up prices to complain about infrastructure overuse). Back-end network innovation is limited anyway, since I don't think carriers actually develop wireless technologies in-house, and the debate over those kinds of upgrades would be done in public before the utility commissions versus the bogus marketingspeak of carriers ("Now!!! We had 3G, now we're offering the new 4H, and soon the 5K speeds!!!!111).

Meanwhile, back at the ranch ... (1)

Infernal Device (865066) | about a year and a half ago | (#40897517)

They refuse to aggressively upgrade their infrastructure and instead pay their execs and shareholders with the money they could use to generate even more profits in the future.

I hope Google smashes them and I hope it's bloody and painful.

iPhone subsidies (0)

Anonymous Coward | about a year and a half ago | (#40897557)

Wasn't there some news about Android users subsiding iPhones? Is this more of the same or will it make it worse?

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