AT&T to iPhone users: use less data or pay more

AT&T announced today that iPhone users are using too much data on their network in larger cities such as New York and San Francisco. AT&T claims that the high bandwidth usage, brought on by iPhone users, is causing network issues, resulting in dropped calls, slow 3G network and/or problems connecting to the network at all.

AT&T recently launched an iPhone app to help consumers understand how much bandwidth and usage they have been using, in order to cut back on the amount of data they use. Consumers with the unlimited data plan may have to pay a penalty if they use more than 5GB a month soon. AT&T is thinking about making consumers who go over their 5GB allowance to pay a fee, depending on the extra usage.

A spokesperson for AT&T, De la Vega, said that 3% of the smartphone users are consuming 40% of the wireless bandwidth in the country. Most of the bandwidth is being used up by streaming audio and video applications on smartphones, which offer constant Internet radio steaming or YouTube video steaming.

As the iPhone comes closer to the end of its exclusive contact with Apple to distribute it in the U.S., AT&T's bargaining with its customers have not been paying off. Customers rated AT&T the worst carrier in the U.S., losing to Sprint and T-Mobile, with the top service provider going to Verizon.

AT&T has been slow to deliver a full iPhone network for consumers, compared to other service providers around the world. Customers had to wait an extra four months after the release of the iPhone 3.0 firmware, to use the MMS feature on their iPhone 3G and 3GS.

Some statistics show that iPhone users consume 50% - 70% of the total data per month, compared to average wireless subscribers. This heavy strain on the network is starting to show in larger cities in a quote from Jim Cicconi, senior executive vice president of external and legislative affairs for AT&T,
"Wireless-data usage is growing far faster than anyone had expected. And if we don't do something soon, we will run out very fast. And then we will have to start telling wireless customers that they can't do all the things they want to do with their devices."

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