AT&T Tries New Data Plan Strategy Offering Lower Prices, New Limits

By Timothy R. Butler | Jun 2, 2010 at 16:0:50

Early Wednesday, AT&T (NYSE: T) announced a dramatic revision to its data plans for cell phones and other Internet connected devices, most notably affecting the Apple iPhone and newly released iPad WiFi+3G. While some new limits have appeared, the attractive low-end iPad plan remains unchanged with a slight advantage over other devices on the network.

According to the company, the new data plans being offered slot in at $15 and $25. The lower priced option offers a 200 MB quota. Interestingly, over usage is priced at the same rate as the initial plan – $15 for an additional 200 MB – unlike the typical industry practice of charging more for overages than the initial quota supplied by the subscription.

The $25 plan replaces a $30 unlimited package that has been the standard offering attached to smart phones over the last few years, including the iPhone since the release of the iPhone 3G in 2008. For most users this will likely work out to be a more affordable option than the old plan, though those with heavy data usage could bump into the new 2GB limit. No unlimited option will be available, though additional data is available at $10 for 1GB, which is a lower price per megabyte than the initial plan.

The company said it would offer text messages warning users as they approach their quota, helping to prevent unexpected overage charges. Existing customers with the unlimited plan can chose to retain the discontinued plan.

The lower priced option is similar to one announced for the iPad WiFi+3G when it was unveiled in January, however the newly announced $15 per month plan includes only 200 MB of bandwidth as opposed to 250 MB in the iPad’s existing plan.

OFB contacted AT&T for clarification as to whether the iPad’s lower priced plan size would be reduced as part of the new plan structure. According to AT&T spokeswoman Marisa Giller, although the $30 unlimited plan will be discontinued for new customers, the iPad’s $14.99 plan will continued to be offered with the larger 250 MB quota rather than the 50 MB smaller one available for other devices.

Also announced was the long anticipated support for tethering the iPhone. Tethering, which allows the phone to serve Internet access to a connected computer, has been supported by the iPhone since the release of iPhone OS 3 last summer, but activation of the featured has been delayed in the United States, where AT&T is Apple’s (NASDAQ: AAPL) exclusive carrier partner. The service costs an additional $20 a month and is only available tied to the new $25 data plan.

Presently, AT&T’s smaller $15 a month plan is something of an anomaly amongst the major cellular providers. OFB contacted Verizon Wireless, but that carrier’s representative declined to comment on any future developments for Verzion’s subscribers. Presently, the AT&T rival retains the slightly more expensive $30 a month plan for smartphones, but that plan’s unlimited usage may prove alluring to heavy bandwidth consumers, such as those who make use of significant amounts of streaming media over 3G or do 3G voice over IP (VoIP) calling using services such as Skype.