A new AT&T service would transfer data costs from consumers to app makers

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According to a Wall Street Journal report, AT&T may soon test a new service that would provide app makers the opportunity to pay AT&T for subscriber’s data usage. Yes, you read that right. AT&T wants app makers to give it money for the data AT&T customers use while using the developer’s applications.

Before you start to think Ma Bell has gone off the deep end, consider the following logical case use of AT&T’s service. Say you’re ESPN and you want to come out with an application that will allow mobile users the opportunity to stream sporting events live on their smartphones and tablets. Data users on throttled or capped (or both) networks might not pay the $5 you want to charge for the application (in addition to whatever monthly fees you want to charge) since it’ll eat into their precious data caps.

What AT&T is doing is allowing ESPN to take the data burden off of its potential customers by paying AT&T a flat amount for data used while consuming content on your application, say $0.01 per MB. All data consumed by customers while using your application will not go against their data limits, and more users will likely sign up for your service and purchase the $5 application. So long as ESPN doesn’t lose money on the deal, it’s a win-win for both them and the consumers.

Of course, AT&T stands to be the loser in this agreement, since they will essentially be providing data free of charge to its customers. AT&T is likely betting that most companies would end up paying more than AT&T would lose in the customer overage charges it’s losing out on by providing “free” data. It’s really hard to see how this deal could work out as a win-win-win for everyone, though perhaps we’ll be surprised when AT&T releases more details of the service later this year.

[Via Wall Street Journal]

  • MVZ

    it’s another case of whole selling a service. if the customer of your app will not use your app because they are afraid of bumping into data caps AT&T is allowing the developer to buy a data service at whole sale prices and resell it at retail prices. AT&T win because they pre sell the data service at a lower price that if they were selling it directly to the end user but they get their revenue ahead of time instead of penalizing the customer furthermore they also win since the developer will contract at&T to bill for reatil usage on behave of the developer 

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