AT&T Nixes Unlimited Plans For New Customers
AT&T has announced that it will stop allowing customers to sign up for an unlimited Internet data plan for smart phones, just before the release of a new iPhone.
Current subscribers are able to keep their $30-per-month unlimited plans, even if they renew their contracts. However, starting Monday, new customers will have to choose one of two new data plans for all smartphones, including iPhones and BlackBerrys.
Customers who use little data will pay slightly less every month than they do now, while heavy users will be hit with higher bills.
One of the new AT&T plans will cost $25 per month and offer two gigabytes of data each month, which AT&T said would be plenty for 98 percent of its smartphone customers. Additional gigabytes will cost $10 each.
AT&T is also offering another plan that costs $15 per month for 200 megabytes of data, which AT&T says is enough for 65 percent of its smartphone customers. They will pay another $15 for 200 more megabytes if they go over.
A gigabyte is enough for hundreds of e-mails and Web pages, but it is quickly used up when watching Internet videos or performing a videoconference. AT&T says the 200 megabytes offered for $15 is enough for over 1,000 emails, hundreds of Web pages and about 20 minutes of streaming video.
With the smaller plan and voice service, a smartphone could cost as little as $55 per month before taxes and add-on fees, down from $70. Ralph de la Vega, head of AT&T’s consumer business, said smartphones would now be accessible to more people.
"Customers are getting a good deal, and if they can understand their usage, they can save some money," de la Vega said in an interview with The Associated Press.
While some web commentators complained loudly about the new pricing, AT&T’s mobile chief Ralph de la Vega told Reuters, "It’s important we give customers the choice. There are some not signing up for smartphone data plans because they’re too expensive," he said.
Jason Prance, an iPhone 3G user in Atlanta, told AP that his first reaction to the end of unlimited usage was to be "ticked off."
"If you’re taking the ability to go unlimited away from people, you immediately get defensive," he told Reuters.
However, he then checked his data consumption on his iPhone and realized that he never used more than 200 megabytes in a month. He said that surprised him because he sends and receives a lot e-mail and watches a lot of online videos.
AT&T said for the iPad, which is a new tablet computer released by Apple in April, the new $25-per-month plan will replace the $30 unlimited plan. IPad owners can keep the old unlimited plan as long as they keep paying $30 each month.
Bernstein analyst Craig Moffett told Reuters that the lower fee for light users was an important step "for public relations" but he noted that this would not help the heaviest users.
"The low end price reduction for light users will reduce – but not eliminate – the inevitable firestorm of criticism from heavy users, who are certain to be the most vocal commentators," Moffett said.
De le Vega said the new plan would not change AT&T’s efforts to improve its network capacity, though it’s thought the new pricing plan could potentially ease capacity restrains and cause fewer network problems.
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