[New Update: The latest outrage is equally offensive: making you pay extra to use communication services like Apple’s FaceTime over cellular (link). You are already paying for bits by the drink on a capped data plan. Bits are bits. Why on earth should you have to pay a surcharge for certain types of bits? (I know, I know, it is high bandwidth traffic that taxes the network and demands low latency. But you know what? Not my problem. Invest the capital to make the network work. That’s the business telcos are in.]
[Original Post]: Quick rant to observe the utter stupidity of AT&T’s move this week. In a response to the decline in demand for cellular voice minutes (down almost 20% in the US since their peak in 2007), AT&T has announced that they will be moving away from bill-by-the minute voice plans to expensive mandatory unlimited voice plans.
Let me get this straight: I am being forced OFF unlimited plans for data because I WANT data, but I am being forced ONTO unlimited plans for voice and SMS because I DON’T want voice and SMS? So unlimited plans are horrible and will be the the ruination of the cellular industry, except when they are not, as in the case of declining cash cow services like voice and SMS.
Why is this stroke of genius necessary? Consumers are currently able to drop down to plans with fewer minutes and save money. To prevent customers from saving money or getting value, AT&T will be moving (and the rest of the industry will be following) toward unlimited voice plans which force-feed their customers more expensive voice plans than they need or want. Don’t grow replacement revenue by introducing new innovations, new services, increasing loyalty, or creating value. Just milk your customers to the point where the pain and frustration level is just below the switching cost threshold.
Sound familiar? This is the exact same behavior I was calling out in Bank of America Sucks. AT&T are such clueless fumbling hypocrites that it would be funny if it were not so annoying. As I pointed out in the BofA post, showing contempt for your customers with backwards pricing and nickel & dime fees is a very stupid and shortsighted way to run a business. We customers will eventually find a way to pay you back, AT&T.
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If you enjoyed this post, you might enjoy: Do The Right Thing, Zynga’s Bad Kharma, Pincus is a Greedy Dirtbag, Netflix: 3 Lessons From the Pricing Fiasco, Walking into a Buzzsaw, Something From Nothing, and Three Keys to Pricing Deals.
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