AT&T and O2: chopping off the mobile industry at the knees.

AT&T and O2: chopping off the mobile industry at the knees.

There was a time when setting a standard was considered to be a good thing.  However, when the standard that you’re setting is shortsighted, problems arise when other people follow your footsteps.

This is exactly the case of AT&T, and now O2.

First, AT&T announces that it is doing away with its unlimited data plan.  This, of course, is met with huge backlash from across the supposed “2%” who would use more than the high end of 2 GB in the company’s new “big” data plan.

Next, O2 steps up and follows suit.  We’ve not yet heard a lot from the UK, but you can be certain that the groans will be similar to what we’ve heard from the AT&T announcement.

Both companies are taking a stance that the price changes are best for the consumer.  They’re staying the course, arguing that the changes will allow them to invest more money in more network capacity.  This is all well and good, but herein lies a few issues.

First off, both companies should have had the foresight to realize what was coming.  O2 claims to understand that mobile data “will be every bit as important as the other commodities that we take for granted – water, electricity, TV signals”

The problem is that, for many, it already is.  For the ones that remain, it won’t be given that chance.  Capping data at 2 GB per month (and let’s face it, overages simply aren’t an option for people’s budget, so 2 GB is a cap) is stifling an industry that’s just starting to get its walking legs.

As the Internet becomes more social, more semantic, data requirements increase exponentially.  Sure, the money has to come from somewhere, but both companies (and all others who would be so ignorant of their surroundings) should have figured that out long ago instead of taking steps backwards.

According to an O2 spokesperson:

“The model we currently have in the industry is broken – data consumption is growing exponentially [doubling every 4 months, with a 20-fold increase in last 18 months] but revenues are largely flat. This means we need to change the way we charge for data and change the perception people have of the value of data.”

This is precisely the problem.  We already know the value of data.  What we don’t understand is the idiocy surrounding how the telecoms are treating it.  Contrary to what seems to be their belief, we’re not so ignorant as to see this as anything other than what it is: money grabbing.

If the industry is to thrive, if it is to ever see the full potential that we’re all dreaming about, telecoms have to wake up.  Figure out other ways to shift the money, without limiting us to unrealistic fences.

The problem, likely, will not be limited to these two companies.  The standard has been set, and other will follow, blind to the path of destruction that these changes leave.

This post is part of our contributor series. The views expressed are the author's own and not necessarily shared by TNW.

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