AT & T caps data use with new plans

Wed, 06/02/2010 - 8:30am
Maisie Ramsay, Wireless Week

AT&T is capping the amount of data its subscribers can use in two new data plans that go into effect June 7 and will no longer be offering unlimited data plans to its subscribers.

The first plan, called Data Plus, provides 200 MB of data for $15 per month. Currently, 65 percent of AT&T’s smartphone customers use less than 200 MB of data per month on average.

AT&T currently offers its smartphone customers a $30-per-month unlimited data plan. AT&T will no longer be offering unlimited data plans to its customers, but existing customers are not required to switch to the new plans and can keep their $30 unlimited data plans.

The second plan, called DataPro, provides 2 GB of data for $25 per month. If customers go over the 2 GB cap, they’ll be charged $10 for an additional 1 GB of data. Currently, 98 percent of AT&T smartphone customers use less than 2 GB of data a month on average.

"To give more people the opportunity to experience these benefits, we're breaking free from the traditional 'one-size-fits-all' pricing model and making the mobile Internet more affordable to a greater number of people," said AT&T CEO Ralph de la Vega.

With the new wireless data plans, pricing for a smartphone voice and data bundle now starts at just $54.99 per month for an individual plan, or $24.99 per month for an additional line on a FamilyTalk plan, $15 per month less than the price of the previous entry level bundle.

Each of the data plans includes unlimited access to AT&T’s Wi-Fi network. The carrier is also rolling out smartphone apps and SMS notifications to help subscribers keep track of their data usage.

AT&T also cut the $29.99 unlimited plan for the iPad in favor of a $25-per-month 2 GB plan, which will only affect new customers. Existing customers can keep the unlimited plan or switch to the 2 GB plan.

AT&T rolled out a long-awaited tethering feature that turns smartphones into a wireless modem that can provide a broadband connection for other devices. The service will be available for an additional $20 per month. Tethering for iPhones will be available when Apple releases iPhone OS 4 this summer.

Research firm Stifel Nicolaus said AT&T’s announcement could kick off a trend toward caps on data usage. “We expect this will be the beginning of such announcements as most other U.S. wireless carriers will presumably soon follow AT&T's lead on this to minimize network hogs from having access to an unlimited data tier,” the firm said in a research note.

BTIG Research analyst Walter Piecyk said the plan change could be viewed as a way to curtail the 2 percent of “extreme” users that are allegedly killing AT&T’s network. 

Industry analysts have expected operators to make changes to their unlimited data plans for some time as it became clear that some subscribers were using considerably more data than others, but paying the same price.

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