AT&T Confronts iPhone Usage Headaches

AT&T said the company needs to “educate the customer” on data usage, particularly in New York and San Francisco, where just three percent of smartphone users are consuming up to 40 percent of the network capacity, according to Ralph de la Vega, CEO of AT&T Mobility and Consumer Markets.

Speaking at a UBS investors conference in New York this week, de la Vega said the most high-bandwidth activity is video and audio streaming. This includes applications on Apple’s (NASDAQ: APPL) iPhone that provide nonstop Internet radio.

“We need to educate the customer … We’ve got to get them to understand what represents a megabyte of data,” said at the conference, according to a report by the Associate Press. “We’re improving all our systems to let consumers get real-time information on their data usage.”

AT&T (NYSE: T) and Verizon Wireless (NYSE: VZ) are locked in a heated marketing battle over which carrier has the better 3G performance. In the AP story, de la Vega said tests showed AT&T’s network to be faster than competitors, but he also noted major problems with connectivity are centered in New York and San Francisco which have a high density of smartphone users.

De la Vega also defended AT&T’s network performance, claiming that testing showed AT&T’s 3G network is faster than that of competitors and that major problems are concentrated in New York and San Francisco, which are packed with smartphone users.

De la Vega didn’t specifically say higher rates are in store, but he did say the company will give high-bandwidth users incentives to “reduce or modify their usage,” which would seem to indicate a price increase for some may be in the offing.

Read the rest at Internetnews.