In announcing its shift to metered
pricing for mobile data in place of its $30 unlimited plan Wednesday, AT&T said the move would "make it more affordable for more people to enjoy the benefits of the
mobile Internet."
Indeed, the new $15 entry-level Data Plus plan cuts the monthly cost in half for anyone who uses less than 200MB of data a month. And AT&T says 65% of customers fall below
that limit. The Data Pro option would provide 2GB of data for $25 a month, a $5 savings from the $30 unlimited plan for the 98% of users that don't exceed that cap each month. Sounds reasonable,
right? The vast majority of AT&T subscribers would end up paying less if they switched to the new plan.
In the near-term, perhaps. But as AT&T and the other major U.S. carriers ready
next-generation networks that can deliver data much faster and allow customers to consume much more data than they can now, the new tiered plans may not look as attractive.
AT&T's 2GB plan
would allow someone to send and receive 10,000 emails and 1,500 emails with attachments. Users would also be able to view 4,000 Web pages, plus post 500 photos to social media sites, and watch more
than three hours of streaming video a month.
That sounds like a lot, but if media-centric devices like the iPad proliferate, more people will be spending a growing amount of time on
bandwidth-gobbling activities like watching video and playing video games. (The new 2GB plan would replace the unlimited plan for new iPad customers as well as smartphone users.) The small percentage
of people who watch mobile video today are already averaging about three hours a month, according to Nielsen.
For carriers, the key in tiered data pricing is to capitalize on huge investments
in upgrading their wireless infrastructure. "They need a pricing strategy that will allow them to charge a premium and extract greater value from these networks," noted Forrester analyst Charles
Golvin in a blog post today about the new AT&T data plans. "Flat-rate pricing will prevent them from realizing that value and limits their future data revenue. This
is the real underlying rationale for these changes." So much for the focus on consumers.
AT&T has provided flexibility, not forcing existing customers to give up the $30 unlimited plan when
they renew service contracts or upgrade to a smartphone. It will also allow people to move between plans during each billing period. So a 200MB user approaching his or her monthly data limit can
switch to the 2GB plan for that month, saving $5 and getting much more data.
AT&T is also offering text alerts and a data calculator to help customers track usage and avoid running up
excessively high bills.
In any case, AT&T likely won't be the only carrier to introduce similar data plans. Verizon Wireless has already said it will adopt tiered pricing for its 4G LTE
network and Sprint and T-Mobile may follow suit eventually. 2010 could end up being the end of the golden age of all-you-can-eat mobile data plans.