Published in Mobiles

AT&T announces huge changes to its smartphone data plans

by on02 June 2010

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Say goodbye to unlimited monthly bandwidth

Many AT&T subscribers in the United States are about to face an adverse network price restructuring that could benefit the overwhelming majority of its smartphone users, while harming those who use an excessive amount of wireless bandwidth.

The US smartphone leader announced this morning that it is introducing two new wireless data plans that make it more affordable for people to enjoy the benefits of the mobile Internet. The first plan, called DataPlus, gives customers the option to purchase 200MB of data for $15 per month. The company claims this is going to be the plan that the overwhelming majority of its users will subscribe to, with enough data to send and receive 1,000 emails without attachments, 150 emails with attachments, view 400 Web pages, post 50 photos on social media sites and stream 20 minutes worth of video. The plan is optimally designed to save up to 20 percent off their wireless voice and data charges and is designed for people who primarily browse the web for news content, social media and use non video-based smartphone applications. AT&T states that 65 percent of its current smartphone customers use less than 200MB of data per month on average, making this plan an arguable game changer for the majority of smartphone users.

The second plan, called DataPro, gives customers the option to purchase 2GB of data for $25 per month. According to AT&T’s synthetic usage analysis, this plan will provide enough data to send and receive 1,500 emails with attachments, view 4,000 Web pages, post 500 photos on social media sites and stream 200 minutes worth of video. AT&T states that 98 percent of its current smartphone customers use less than 2GB of data per month on average. In practice, this plan is most suitable for those who stream large amounts of video over 3G and for iPhone customers who occasionally tether their jailbroken phones to desktop or notebook devices (although AT&T has a separate plan in mind for this particular market group).

According to some analysts, however, the big game changer AT&T has announced today is the new overage system for its data plans. With the DataPlus 200MB plan, customers will pay an additional $15 fee for each additional 200MB of data consumed. With the DataPro 2GB plan, customers will pay an additional $10 fee for each additional 1GB consumed. This is very simple and straightforward. In fact, when taken into comparison with AT&T’s 5GB DataConnect plan which charges an additional $50 per 1GB overage, the company’s new DataPlus and DataPro options are very suitable options for the majority of the smartphone market.  The company has stated that it will even allow customers subscribing to DataPlus 200MB and DataPro 2GB plans to flexibly switch between the higher plan and the lower plan at the beginning of their next billing cycles, depending on monthly usage.

Tethering is another offer that AT&T has announced as an “add-on” exclusively for the DataPro $25/month plan. For an additional $20 per month, customers will be able to legally use their smartphones as modems to provide a broadband connection for desktops, notebooks, netbooks, tablets and other computing devices. Tethering for the iPhone will legally be made available when Apple releases OS 4.0 later this month. If we do a comparison between the DataPro 2GB + Tethering plan ($45/month) and the company’s traditional DataConnect 5GB plan ($60/month), the former compares unfavorably to the latter and it would be a better choice to stick with DataConnect for the largest possible bandwidth usages.

AT&T has also announced that Apple iPad customers will be affected by its introduction of new data plans. The current $30/month iPad “unlimited” data plan is being discontinued from the pricing lineup and will replaced by the DataPro 2GB plan for $25/month. The company points out, however, that current subscribers to the iPad data plan can continue unaffected by the price changes, but will be obligated to downgrade to the DataPro plan if they choose to discontinue service.

Many analysts have taken into account the broad scale changes that AT&T has announced and have leveraged them against the trending “spectrum crisis” that seems to have CTIA and the mobile wireless industry up in arms. Mark Collins, AT&T Mobility Senior Vice President of Data and Voice Products, made matters crystal clear by stating that “the concept of unlimited data is a thing of the past, particularly in light of the oncoming spectrum crunch to make wireless broadband an even more precious commodity than it already is.” From his disposition, we can assume that mobile broadband in the United States will follow the ways of Australia in regards to wireless bandwidth caps.

“The U.S. wireless industry is a virtuous cycle of investment and innovation, and spectrum is the lifeblood of this industry,” AT&T Mobility CEO Ralph de la Vega stated during his CTIA keynote in February 2010. “Smarter devices lead to a proliferation of applications, which in turn drives more consumer demand for spectrum.” The increased consumption of smartphones and applications means more consumption of mobile data and more strain on back-end networks. Cisco Systems, a major wireless network hardware provider, estimates global mobile traffic to increase 40 times from last year, with roughly a 108 percent growth from 2009 to 2014.

On the bright side, “the U.S. is also leading in the commercialization of next-generation mobile broadband networks,” de la Vega said. “U.S. GSM operators are deploying advanced HSPA to give customers 3G+ performance now.” The United States will be the first country to deploy LTE on a wide commercial scale, and AT&T estimates that 53 million smartphones will be sold in the US alone in 2010, compared to 25 million in China.

Through the tidal wave of announcements and ongoing concerns about wireless broadband sustainability throughout the country, AT&T insists that it has laid a solid framework for data pricing that should continue all the way through to the company’s LTE rollout over the course of late 2010 and 2011.
Last modified on 02 June 2010
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