Why is AT&T delaying rollout of iPhone tethering, MMS?

On Monday, Apple announced at its Worldwide Developer Conferences in San Francisco that it plans to finally add data tethering to the iPhone, which will turn the device into a wireless modem to connect laptops to 3G networks.

(Credit: James Martin/CNET)

Updated at 4:09 p.m. PDT with a link to a Boy Genius report and a clarification on when AT&T expects MMS and tethering service to be ready.

iPhone users across the U.S. were disappointed Monday to learn that AT&T, the only operator in the country offering the iPhone, won't immediately support a couple of key new features in Apple's new 3.0 operating system that will be available starting next week. But AT&T says these features are coming.

On Monday, Apple announced at its Worldwide Developers Conference in San Francisco that it plans to finally add data tethering to the iPhone, which will turn the device into a wireless modem to connect laptops to 3G networks. It also announced that the new 3.0 version of the iPhone operating system will support multimedia messaging messaging.

These features have topped iPhone users' wish lists since the phone was launched two years ago. But millions of iPhone users in the U.S. will have to wait a little bit longer. That said, AT&T says the features are coming soon.

"We will be offering a tethering plan and MMS for the iPhone," Mark Siegel, AT&T's spokesman, said by phone. "But we haven't announced a date."

Siegel was short on details about when these features would be offered, which devices they would be offered on, and how much it plans to charge for the services. Siegel confirmed that the MMS functionality will be offered by the end of the summer, but he wouldn't give any indication as to when tethering will be added.

Apple currently supports two versions of the iPhone on its network: the original iPhone, which went on sale in 2007 and operates on AT&T's 2.5G EDGE network, and the iPhone 3G, which was introduced last summer and operates on the faster 3G network.

Starting next week, AT&T will get another version of the phone called the iPhone 3G S. This device will come in two flavors--a 16GB model that will cost $199 with a two year contract and a 32GB model that will cost $299 with a two year contract. AT&T and Apple will also continue to sell the 8GB iPhone 3G announced last year for $99 with a two year contract. Older 16GB iPhone 3Gs will be available for $149 with a two-year contract until stock of that device runs out, Siegel said.

Siegel couldn't say whether MMS and data tethering will be available on older versions of the iPhone. But if Apple is offering the features as part of the software upgrade, and AT&T offers the service for the iPhone 3G S phones, it would make sense for the company to offer the features on all iPhones supporting the upgraded software. But Siegel couldn't say for sure if this was the case.

While a delay of a few weeks or even a month or two might not seem like a big deal to some people, it seems strange given that AT&T already offers MMS and smartphone data tethering on several other devices. MMS is practically a standard feature on many new phones sold today. MMS messages cost 30 cents to send and receive. And MMS is included in the carrier's messaging plans, which iPhone users already subscribing to those plans are actually paying for a service they can't yet use. Those plans start at $5 a month for 200 messages, and an unlimited plan costs $20 a month.

AT&T also already offers data tethering on several devices. In fact, AT&T's Web site lists no fewer than 11 smartphones that can be used to provide wireless Internet service to laptops. Phones that offer this functionality, include the recently launched Nokia E71m, the Samsung Propel, and the Palm Centro. AT&T also supports data tethering for BlackBerry devices, including the Curve, Bold and Pearl.

According to AT&T's Web site, smartphone tethering plans, which offers Web connectivity for a laptop plus personal data usage for a smartphone, cost an additional $65 a month. The BlackBerry tethering plan costs $60 a month. Both services include 5GB of usage per month. Customers who exceed the allotted bucket of data usage are charged for overages on a per kilobyte basis.

It's difficult to understand why AT&T would need additional time to offer these new features on the iPhone, since it's clear that the company already offers the services and has established rate plans for them. Siegel wasn't able to elaborate or offer any explanation as to why AT&T would need more time to activate these services.

But I wonder if AT&T is worried about overloading its network. iPhone users download games, video and other Web data at two to four times the rate of other smatphone users, according to comScore. So if they also send mobile messages and use tethered data connections at much higher rates too, AT&T might feel some pain on its network.

Even though AT&T has made a lot of noise lately about upgrades to its 3G network, poor network performance is one of the biggest complaints from iPhone users (myself included.) At this year's South by Southwest conference in Austin, iPhone users complained of delayed text messages, poor Web access and dropped calls.

I'm not really sure how a few weeks or even a couple of months would help AT&T overcome this problem, but perhaps the company needs a little bit more time to prepare its network for what could be an onslaught of activity.

The Web site Boy Genius Report referenced an anonymous source who said that AT&T must manually remove all the "Opt Out MMS codes" on each iPhone account to activate MMS. I'm not sure how true this is, since 29 other operators around the world are planning to have the MMS capability ready when the software launches.

Regardless of the reason behind the delay, one thing is certain. AT&T isn't winning any fans among iPhone users for not making these features available when the software is released.

[bill94134]

This is typical of AT&T to be behind the curve at every turn. First they simply prevent you from tethering, then they thwart using the new functionality as designed in 3.0. When does their exclusivity contract expire so that I can take all of my firm's AT&T phones off to a real carrier that has some consideration for its customers? It cannot be soon enough. Perhaps then I can turn on the 3G again and have it work, from time to time. As it stands, I have to turn off 3G just to get a decent signal from one block to the next. Otherwise, I can't even make a telephone call.

[bill94134]

I forgot to add that it is exactly this type of behavior that will force the current administration to curtail the use of exclusivity contracts for smartphone devices. When a company has the capacity to provide services on its devices, but refuses to do so, and gives no reasonable excuse for failing so to do, they should be punished by millions of dollars in fines until they correct it.

[rllaw]

Fines? If customers really care, they will simply punish AT&T with millions of dollars in revenue going to another carrier, and doing without the iPhone. Do you have any idea how much a mobile phone costs if it's not subsidized by the carrier? They subsidize the phone for you in exchange for you signing up for a contract, which guarantees them two years of income. As for exclusivity contracts, banning them would only make it nearly impossible to get a new smartphone. A carrier pays dearly for exclusivity (it has to in order to avoid the situation where a maker says, "Fine, we'll just put a CDMA chip in along with the GSM chip and let everybody play"), but there is good reason for it. Think of all those data contracts AT&T has for iPhones that it just never had with BlackBerry devices. Fines? Really? Did you even think, even just for a second, before you decided Obama needed to save our iPhone along with our banks, houses, cars, and the Afghani people?

[Kriemey]

Afganis? Really? Take your political frustrations elsewhere, you maniac.

Exclusivity is the only way crappy cell phone companies have been able to stay in buisness in the past. Sprint is a prime example of a company who seriously fell out of the game until a year or so ago, and maintained a large portion of their subscribers because of their contract fees.

In Europe, contract fees are illegal, and it encourages buisnesses to stay on their heels by offering large incentives for their customers. This is why America has been using flip phones for years while countries in Europe have had smart phones, complimentary data and have been actively using text messages for 10 years. I've seen better service plans offered in Tanzania, where data networks were freely accessible to everyone, even people with pay as you go phones with zero credit.

Bill was merely suggesting that a customer should not be forced by financial barriers to continue with a company that is not satisfying their needs.

[regulator1956]

I like flip phones.

[mike31082]

rllaw I've had better reception, and service from Sprint, than I've had from AT&T, and plan on switching back to them the first day they start offering the Iphone. ATT might boast about how many customers their up from Iphone sales, but just wait until the Iphone is offered on other providers to see how much of a mass exodus there is of customers from the service.

[cesardlg]

at&t is screwing the pooch. you have to figure verizon, sprint, and tmobile are just salivating waiting to get their hands on the iPhone.

[jgvillan]

Maybe not so much.... T-Mo got their G1, Sprint has the Palm Pre, and Verizon has the Blackberry Storm. And all don't go to AT&T. =)

[chuck_whealton]

I agree with you. When I simply couldn't take anymore of my "former carrier", I didn't even consider an iPhone or AT&T. I went with T-Mobile.

Yea, their network isn't as far reaching as many, but ti's got signals where I need them and REASONABLE rates. $65/month for 5GB is HIGHWAY ROBBERY.

Even as an Apple customer (I love thier technology), I can't understand how a phone could push so many to waste so much money with AT&T.

[question4seller]

the biggest draw back to getting an iphone is that it's on ATT crappy and overly expensive network. I can understand Verizon plans being more expensive because the provide the absolute best coverage, but ATT is barely better than Tmobile.
I've had the iphone for Tmobile (jailbroken) and it was my favorite phone i have ever tried but had to get rid of it hence it doesnt support UMA (hotspot@home). I would go w. ATT but im deff. not going to pay for the inferior service and overpriced plans.
AT&T you need to drop your prices if you want more customers... which in turn will mean even more of a congested ATT network.

[jgvillan]

Oh, i think that AT&T will drop their prices when iPhones stops being an exclusive AT&T product. Just need to wait awhile.... =)

[jaybarrow]

I will be seriously PO'd if AT&T charges extra for MMS. After the iPhone 3G came out we had to pay extra just for SMS when it was already included with the original 2G iPhone data plan... talk about nickel and diming... if picture messaging costs extra that will be the straw that broke the camel's back... I'd rather pay an early termination fee rather than pay extra just to send MMS. With T-Mobile SMS/MMS was standard at a cheaper $

[dizzytrmpt]

Amen! I think it would be appauling if AT&T were to charge for MMS. If I were apple I would totally take my buisness elsewhere. Why would I keep the worlds best selling phone with a 3rd grade service company (AT&T), when sales could potentially be higher with another????

[mirk87]

why would you even jump to that conclusion!?! it was never said nor will ever be said by the company that you will pay for mms, learn to read and not make so much drama and *****!!!

[mrfinkleman]

Funny, now i understand why the 2g, which i have, will not have access to MMS capabilities. Since this is part of my service plan, it makes sense why Apple and AT&T would not let the 2g have this in 3.0. Sounds like a conspiracy to me.

[clynx]

We need to change subject from. "how fast the network is" to "how much capacity does the network have and back to unlimited". Data caps are bad customer service and censorship that really ruin the enjoyment of any of these devices. If I have to constantly check the meter to see if I can even use it at the moment especially at these prices is a waist.

[dehling]

Tethering on existing AT&T smartphones is "automatically" part of your AT&T account if you have an unlimited data plan. An iPhone, however, requires an unlimited data plan already. So perhaps AT&T is just looking to figure out if/how it can add an additional charge for iPhone users who want tethering (unlimited data PLUS??)

[bonesbautista]

Actually, tethering is not included with ATTWS smartphone or PDA plans - DataConnect is a provisioned option that ATTWS charges for, no matter the phone they're selling. And, the blogger is not correct either with the "additional" charge. The "unlimited" data is for the phone or the PDA only, and doesn't include provisioning for external devices - read the TOS.

ATTWS charges a total of $60 for provisioning for DataConnect - a $15 data plan will allow for a $45 DataConnect charge, a $30 data plan will allow for a $30 DataConnect charge, a data card charge is $60 per month. I've been using their data cards and tethering through DataConnect for years. No matter your choice - tethering or a data card - you get 5GB of data, and the unlimited data exists no longer.

[mmitsuda]

Wow! My old and busted Treo 650 that is being held together with duct-tape can still do BOTH MMS and tethering on Sprint! Not to mention always had the Copy/Paste ability and video! Sorry AT&T, not impressed with your pathetic service or the iPhony.

At the same time, I am not impressed with the missing 'features' on Palm Pre and the higher cost for tethering on Sprint. Sorry Sprint/AT&T. I am sticking with what I have, replacing the duct-tape once and a while, until you get your act together with both a phone and service that can match with what I have now!

[seven7dust]

it's funny that this iphoney you talk about is used by 66% of the mobile web users
while Windows mobile devices and others languish in single digit figures !
plus has 50,000 apps downloaded more than a billion times !
tethering copy and paste multi-tasking etc aren't used by the majority !
either way Apple believes in perfection so yes they take their time with things
and they started all this only 2 yrs back !
I wonder if Nokia phones were missing any features in 1991 !

[cdotspace]

Apple hasn't perfected copy/paste yet?

[m_gear]

"Apple believes in perfection so yes they take their time with things
and they started all this only 2 yrs back !"

-------------------------------------------------------------------

Oh, please... The sound quality available from iPods lagged far behind that available from the majority of competing devices until the Nano 2G came out. How many years after the first MP3 players came out was that? Not too mention the other features that iPods lacked for years.

Imagine if Microsoft only allowed one retailer to sell Windows, or if you could only get software updates through one internet provider. That wouldn't cause an uproar or anything.

Apple offers an awful lot of features in its products that other companies don't offer. The iPod's user interface, for example, won it a lot of customers. At least for the iPod, though, massive, cleverly designed advertising campaigns and the perception that Apple was "cool" earned Apple way more business than the quality of its product did.

[Chris Compton]

I agree on most parts. I was in China over the summer and ATT was the only supported carrier there. I think that as far as area ATT is the best. I also agree though their network is shoddy and they need to get it updated which is what they said was their plan for the next year. I have to say though the iphone makes it worth having I have used and set up a lot of phones for my company and friends and the iphone just trumps everything else out there.

[twolf2919]

This is hogwash. I was in China in 2006 and 2008 and had T-Mobile then - I used my phone without trouble. I think it just depends on what GSM band your phone supports. Also, you don't even have to use *any* of the carriers while overseas - just buy a prepaid SIM card - much cheaper way to go.

[jgvillan]

Eh, so who would you blame. Apple for selling a product that should, but doesn't, have the functionality of what it promises when they knew AT&T wasn't ready, or AT&T for not having that functionality ready when they knew that Apple is going to have it out. IMHO, they both missed the mark and just plain sucks in this regard. I got an LG Incite, and I'm happy with the fact that I can tether, MMS, upgrade my memory from 8GB to 16GB, have an extra battery, and not have to worry about phone drops as much.

[DosEquisXX]

"The Web site the BoyGenius referenced an anonymous source who said that AT&T must manually remove all the "Opt Out MMS codes" on each iPhone account to activate MMS."

This is definitely not true. Basic automation tools like Winnrunner can easily do manual changes like that spread out over as many computers as you want to run at the same time. If they really did need to go through each account and remove the feature it would take them a couple of days with an average size computer lab running 24/day.

[1truBob]

BGR link FAIL -- you linked back to your own same article -- a circular reference. Here's the correct link for article you quoted on The Boy Genius Report: http://www.boygeniusreport.com/2009/06/08/the-reason-why-att-wont-support-mms-with-the-iphone-until-late-summer/ .

[kcotham]

AT&T isn't the only one behind the curve, the entire industry in the United States is behind the curve. The telcos were supposed to have invested in new technologies back in the 1990s but pocked the money instead of investing in R&D. If they hadn't, we'd all have fibre optic cable going to our houses by now.

Oh, and in Europe, the caller and the person being called aren't both billed for the time. Only the caller is billed. The Germans and Italians that would come to our US office back in 2004 were appalled at the situation here. Americans, being sheep to big business again.

[agt7648]

We're sheep because we have no choice? That makes sense.

[kcotham]

We're sheep because we just sit back and take it from the telcos. We need to, as a citizenry, speak up and demand reform. But so much of the population are cell=phone junkies and so used to overpaying for slow "broadband" speeds, it'll never happen. Americans have become apathetic by nature anyway, at least in the past 50 years.

[AssassinoSogno]

I know exactly what you mean! I lived in Bari, Italy most of my life, and when I got called by Family and Friends back in Italy, my Bill as huge. I thought it was the end of the wold for a moment there, but Back to the subject. So I just f***ing got my iPhone 3Gs and I was so disappointed in AT&T when I couldn't tether on A road trip the day after I got it, and that's one of the key reasons I replaced my old one, but I guess I can't be to hateful since i did not look into it. I say like most of you people disappointed in AT&T is, it is just a visually polished Tmoble. iPhone has become like the MacBook Air, its for impressions and impressions only. and I am not saying that I hate the MacBook air because of things I have heard its because I am posting this with an air right now. They may have lowered the price of the phone but they did not lower the price of the bills and there just going up up up. There asking for more than you can deliver or want to deliver, and there not going to get it easy.

[blogbrowser]

The only benefactor in the ATT/Apple exclusive iPhone deal seems to be ATT. No MMS til "end of summer", no tethering, $699 for an existing user with a year left on his contract to upgrade to a 32GB iPhone all on top of the crap service (poor 3G and reception) in downtown Chicago! I can't imagine how many iPhones would be sold if they opened it up to other carriers. I would jump ship in a heartbeat. I hope Apple got everything they wanted when they struck this deal with ATT. Wonder if they think it was a mistake?

[mattyyg]

I couldn't agree more. I call ATT a few times a week to tell them their coverage in downtown Chicago is pathetic. It's only the 3rd largest city in the US, you wouldn't expect to see "No Service" or "Searching..." when your standing at 200 N Michigan Ave. Come on ATT, GIVE US SOME SERVICE WE'RE ALL PAYING WAY TOO MUCH FOR!!!!

I am off ATT the second another carrier support the iPhone. Terrible coverage and now they pull this crap. Just horrible

[fondy]

One of the things that originally led me to the iPhone was the transparency of pricing and availability of features. I heard rumors that other carriers had passed on the iPhone due to Apple's insistence on things like unlimited data plans and no locking out features that carriers typically charge extra for (like ringtones and photo transfers). It figures that the carrier who did sign on wound up doing a crappy job of supporting the device.

[pedrofuego]

It's hard to remember if AT&T has done anything correctly in regards to the iPhone. The upgrade policy (read: penalty) for loyal iPhone users is difficult to tolerate.

[Yellowspikes]

AT&T has got to be the up most dumbest company in the U.S. the service sucks!!!!!!!!!!!!!!!!! the 3G is not dependable!!!!!!!!!!!!! well I guess I should say it's not in very many places unless u live in bigger cities. But from where I live the smallest town surrounding my area has 3G but not my town lame!!
Oh and to make it even better AT&T the only company that has the iPhone won't get tethering and MMS when 3.0 is released you have got to be kidding oh and they probably will charge us more for just wanting MMS when we already pay out our A.. for our plans now. I mean 94$ for the lowest plan!
I so wish that Apple would cancel their contract with AT&T and go to Verizon. For the reason being the largest 3G coverage don't believe me check Verizon and lovely AT&T maps and compare. Also better service!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Apple would see a huge improvement in their numbers if they moved the iPhone to Verizon I know for a fact!

[VDBMan]

HMM AT&T is the "most dumbest" hunh? That is a very strong statement for a person who hasn't even managed to learn their own language. Every service provider is terrible in their own way. Verizon is no better than AT&T in how they will try to screw you, believe me I've had both. Verizon does have a very large coverage area, but that is really the only plus of their service. The phones are not that great, the plans are expensive, and they work on an outdated technology. It is correct to say that AT&T is also bad in its own right, but lets not make other carriers out to be knights in shining armor that will save the day once the exclusivity ends. It is what it is people, deal with it.

[professionaladventurer]

Damn, what a bunch whiners. Get an iPhone or not. Every carrier has pros and cons. Booo Hooo the world isn't perfect. Get over how you know best.

[asparra]

The American consumer has the right to complain for services promised and not delivered. This is a free market and should have the recourse to change services and break our contracts if at&t doesn't hold up their end of the deal. I am locked in to this horrible service. Please understand we are not a bunch of whiners. This is a place to vent and gain understanding and knowledge...

[Spyers]

Hmm, more reason to Jailbreak the phone and move to T-mobile.

[Eddie-c]

Really Spyers? You think that's a good move after they just got pwned?
http://www.theregister.co.uk/2009/06/09/t_mobile_hack_latest/

I think T-Mobile will be doing some fast-talking and their customers might gear up for a very fat suit against them.