AT&T (NYSE:T) Senior Vice President John Donovan says that the company’s wireless data traffic has grown 20,000 percent over the last five years according to TechCrunch. Donovan says wireless data consumption has doubled each year since 2007. The company blames the “wireless data tsunami” on the increasing popularity of smartphones. AT&T’s own smartphone sales numbers reflect the growing smartphone demand. The company broke records last year when they sold 9.4 million smartphones in the fourth quarter of 2011. AT&T also acquired 8.9 million new subscribers last year.
Growing subscriber numbers plus booming smartphone sales equals a major crunch on their wireless data networks. Donovan says the wireless carrier has dedicated over $95 billion to its wireless infrastructure over the last five years with $20 billion in 2011 alone and reportedly another $20 billion earmarked for 2012. So how can AT&T keep up with the demand? One unpopular solution enacted by AT&T in October 2011 was to slow down the wireless speeds of any subscribers who seem to be abusing their grandfathered-in $30 unlimited data plans.
Though the wireless carrier said that only the top 5% of those with the unlimited plan would be affected by the slower speeds, many AT&T users have made claims that they have been reprimanded for using as little as 1.5GB per month. AT&T’s new pricing structure offers a $30 for 3 GB per month plan, which basically says the days of unlimited data are over, and AT&T is trying to rid itself of the remaining unlimited plans as quickly as possible.
What are your thoughts? Is this poor business ethics? Is AT&T finding a way out of honoring their contracts?