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AT&T’s iPhone Tethering Plan, Some More Information

Since first revealing some rumored specifications regarding AT&T’s iPhone tethering plan, the reaction online has been “less than accepting.” While Apple has surely been leaning on AT&T to unveil tethering, a lot about the service remains unknown.

Many iPhone owners and potential tethering customers seem to be angered by the idea that AT&T would charge $30 on top of their current setup, especially when less expensive solutions exist. However, tethering is premium functionality, and AT&T knows that. They also know that most people who need the service are frequently traveling where wi-fi is not always available. Fortunately, AT&T is not Apple. Unfortunately, AT&T’s network is AT&T’s network, and for the most part, a service like tethering comes down to their decisions.

Apple has been leaning on AT&T with the service. That is a fact. What we don’t know is how much of an impact it’s having, if any at all. The first email thread that Gizmodo broke back in August, was a simple one liner from Apple CEO Steve Jobs. In response to a customer’s question over the lack of tethering options for the iPhone, Jobs replied in an email, “We agree, and are discussing it with ATT.” However, the specifications under which both companies must come to an arrangement have not been made very clear. When AT&T rolls out tethering, no matter what they charge, Apple will get a share of the revenue from each subscription.

As you can see in AT&T’s available data rate plans, there’s a lot of money in this service. AT&T knows that customers who need the service, will pay for it, and iPhone users will not outright give up their iPhones for cheaper tethering somewhere else. Apple and AT&T need to come to a revenue sharing arrangement that benefits both companies. It would be in both of their best interests to integrate a streamlined user experience. Whether it gets delivered via an iPhone firmware software update, or through iTunes, Apple should be handling the user experience and tethering integration software.

This is a major selling point for Apple, especially after the success of the iPhone, which in essence, is all user experience. Understandably, what’s going on here is, Apple is leaning on AT&T for the service to be unveiled, as they seemingly have a solution cooked up, however AT&T is hesitating with the roll out for whatever reasons (revenue splits, network hiccups).

Jason D. O’Grady over at ZDNet has an interesting poll asking his readers whether they would pay an additional $30 per month for iPhone tethering. At the moment, out of 940+ voters, 80% of them said they would not pay for the functionality. So it seems that AT&T would not be losing any customers, nor would they be risking a consumer backlash if tethering was offered for $30 per month. If only 20% of their customers pay for the service, they win. Within the core tech community, $30 may seem like far too expensive of an option for most to consider, however the added functionality may be a no-brainer for most road warriors.

While it may seem like a long shot, there is a chance that Apple and AT&T may rework their iPhone data plan offerings with tethering rolled into some of them. AT&T’s current Blackberry tethering options are nearly identical to those rumored for Apple’s iPhone, so a shakeup could be a very welcomed surprise. As MacBlogz previously explained, “new iPhone plans may be rolled out with tethering rolled in.” This could present a few new options for the cell carrier, and give additional incentive for potential switchers.

Tethering could be bundled into new rate plans based on usage. While unconventional, it could offer added incentive for Blackberry users, and people on the fence with getting an iPhone. Nearly everything that Apple and AT&T have done with the iPhone has been unconventional, and its worked. Rolling out a heavily demanded feature like tethering with some unconventional packages would (to say the least) be welcomed by the industry. However, if AT&T were to roll out tethering for iPhone users at a lower rate than what Blackberry users currently pay, they may face a backlash from those customers. For this reason, it’s easy to assume that AT&T will play it safe and offer iPhone tethering plans that will be nearly identical to Blackberry plans. They may be marketed differently, and offered at different price-point breakdowns, however long-term revenue and the amount people pay for AT&T’s network usage, will be the same.