AT&T is already facing growing dissatisfaction from subscribers over service quality, and it looks like the exclusive U.S. iPhone carrier is about to throw some gasoline on that fire.
At an investor conference in New York City Wednesday, Ralph de la Vega, chief executive of AT&T Mobility, said the carrier may change the way it bills customers for wireless data usage in response to the heavy load that iPhone users have been placing on its network.
AT&T currently charges iPhone customers a flat rate of $30 per month for wireless data. Although a usage-based pricing model isn't coming right away, de la Vega said this may be the best course of action as AT&T struggles to improve lagging service levels in San Francisco and Manhattan, two areas with especially high iPhone penetration.
Currently, 3 percent of AT&T's smartphone customers account for 40 percent of wireless data traffic, according to de la Vega.
"This is going to get fixed," de la Vega said at the event. "In both of those markets, I am very confident that you're going to see significant progress."
AT&T's initial efforts to curb its subscribers' wireless data usage will consist of "incentives" that show customers exactly how much wireless data they're using, according to de la Vega. "The first thing we need to do is educate customers about what represents a megabyte of data," he told attendees.
The iPhone has been a double-edged sword for AT&T, on one hand revitalizing its flagging business while on the other putting pressure on it to make the necessary network upgrades to light up all the iPhone's features.
AT&T has long whined about iPhone subscribers' data usage, but the reality is that with new and bandwidth-intensive apps arriving on Apple's App Store every week, it's a problem that's only going to get worse.
Meanwhile, AT&T was roundly criticized for its late implementation of multimedia messaging and has yet to fulfill its pledge to support wireless tethering by year's end. Bubbling subscriber discontent is apparently hardening, as AT&T was ranked dead last in Consumer Reports' annual wireless customer survey.
AT&T's struggles have given Verizon a golden opportunity to shine light on its service shortcomings, and the two carriers recently engaged in a brief but spirited campaign of television advertisements aimed at highlighting each other's weaknesses.
AT&T is making a point to show iPhone subscribers that it wants to improve its service. The carrier currently offers iPhone subscribers an app that lets them relay the location of wireless dead spots back to the mothership. The only question iPhone users are asking now is how long it'll take their carrier to fix them.