AT&T Wireless Kills Unlimited Data Plan

In a controversial move, AT&T Wireless this week announced that it will no longer offer an unlimited data plan for new smart phone contracts. AT&T is the first US-based wireless carrier to do so, but it most likely won't be the last. And while some consumers will save money under AT&T's new tiered pricing plan, data hogs—especially iPhone users—have some tough choices ahead.

"To give more people the opportunity to experience the benefits ... of mobilizing everything on the Internet, 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," says AT&T Mobility and Wireless President and CEO Ralph de la Vega.

And that will certainly be true for those consumers who come in at the low end of the usage model. In lieu of an all-you-can-eat, unlimited data plan that costs $30 per month, AT&T Wireless will now offer new smartphone customers two data plan options. The first provides 200 MB of data per month at a cost of $15, while the second tier provides 2 GB of data for $25 per month. Additionally, with the release of iPhone OS 4.0 later this summer, AT&T will finally offer tethering support to iPhone users at a cost of $20 per month; this feature was actually added to the iPhone a year ago.

According to AT&T, 65 percent of its smartphone customers utilize less than 200 MB of data per month, so these people can save a significant amount of money under the new pricing scheme, $15 a month, or $180 a year. The company also noted that 98 percent of its customers use less than 2 GB of data per month on average.

For those customers that choose a tier and exceed their limit, the costs add up. Those on the lower-end, 200 MB plan will receive an additional $15 fee per 200 MB of data when they exceed the limit. Meanwhile, those on the 2 GB plan who exceed their limit will receive an additional $10 fee per 2 GB.

Existing iPhone customers can opt to stick with their existing, unlimited data plan or pick a new tiered pricing plan. However, if they choose a new plan, the unlimited plan will no longer be offered. The tiered pricing plans will be the only option for new customers starting next week, on June 7.

Today, the base monthly cost of a typical smartphone from AT&T or any other US-based wireless carrier is about $80 after fees and taxes. But this assumes unlimited data. By lowering the monthly fee on these phones, AT&T hopes to attract new customers who were put off by the high prices of smartphone usage plans. (Other fees involve voice and text plans, among other things.)

And if you don't see Verizon Wireless advertisements touting that network's unlimited data plan in the days ahead, it's reasonable to assume that Verizon, and then other major US wireless carriers, will soon be following AT&T down the tiered pricing path. Verizon has been particularly aggressive in going after the quality (or lack thereof) of AT&T's wireless network. This is an opportunity the company wouldn't ignore, unless of course it is hatching a similar plan.

If you're an AT&T Wireless customer curious whether you can save money using one of the new tiered pricing plans, please read Can You Save Money with the New AT&T Tiered Pricing Plans? on the SuperSite Blog.

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