Thursday, June 3, 2010

AT&T Dials Up Limits on Web Data

In a significant shift in how phone carriers bill customers, AT&T Inc. will stop selling unlimited Internet data plans to new customers that buy smartphones and iPads, and will instead begin charging more for heavy bandwidth users.

New AT&T customers will have to chose between two data plans with monthly usage limits—and pay additional fees for extra use. Existing customers, however, can stick with their current plans, AT&T said.

The change could mean lower rates for people who use their phones mainly for email, Web browsing and phone calls, but higher bills for people who use their iPhones or BlackBerrys to watch online videos or listen to Internet music.

The move by the No. 2 U.S. wireless carrier kicks off a broader realignment in the industry, where networks have battled to manage an explosion in data usage and phone applications on more powerful devices. It comes as Apple Inc. is expected to announce a new iPhone next week, and about a month after AT&T began carrying the iPad tablet on its network.

AT&T's move breaks the ice, and the question is whether other carriers will follow suit. A Verizon Wireless spokesman declined to comment, but Verizon Wireless CEO Lowell McAdam indicated in an interview last month that he, too, is looking at charging based on data usage. Carriers need to take an approach that targets a "bucket of megabytes," Mr. McAdam said.

Sprint Nextel Corp. said Wednesday it isn't considering moving to usage-based pricing, and believes its unlimited offering sets it apart. A spokesman for T-Mobile USA, a unit of Deutsche Telekom AG, declined to comment.

AT&T's change promises new headaches for consumers, who last decade were freed from the need to count minutes on their cellphone plans. Subscribers now face the prospect of having to check their data counter before opening an email or checking out a video on YouTube.

"I think most users don't really understand," said Eva Otto, a 33-year-old real estate broker in Seattle. "A lot of people don't realize how many megabytes they're downloading."

AT&T said it plans to help by giving subscribers options for keeping up with their usage, from text-message warnings when they get close to limits to apps that let users see their data consumption.

"It's going to be interesting to see what the customers do," Ralph de la Vega, head of AT&T's wireless operations, said in an interview. He said AT&T's handset partners were pleased with the move. Apple had no immediate comment.

In place of a $30 unlimited monthly plan, new AT&T subscribers will be able to choose between paying $15 a month for 200 megabytes of data or $25 a month for 2 gigabytes of usage. Consumers who exceed the monthly limit must pay $15 or $10 additional, respectively.

"The danger here is that users second guess whether they should download the next app, watch the next video, do the next search, etc. because it might cost them money," said Matt Murphy, a partner at venture capital firm Kleiner Perkins Caufield & Byers. "It would be a shame if it had any impact on usage at just the time when users are discovering the mobile Internet and the new vibrant world of applications."

AT&T presents the plan, the second time it has cut prices on its wireless plans in six months, as a benefit for most subscribers. The carrier says two-thirds of its smartphone customers use less than 200 megabytes a month and 98% use less than the 2 gigabytes of data offered under the bigger plan. Sanford C. Bernstein estimates the average iPhone customer uses 250 megabytes of data each month.

However, heavy users of streaming video services like Google Inc.'s YouTube or music services like Internet radio outfit Pandora Inc. could quickly burn through their allotments. AT&T estimates that one minute of streaming video consumes two megabytes of data.

Google declined to comment on AT&T's change. A Pandora spokeswoman said only a small percentage of users would be affected by the limit set by AT&T's larger data plan.

The move comes as regulators at the Federal Communications Commission are increasingly concerned about "bill shock" among wireless subscribers. Some consumer advocacy groups criticized the move, arguing it hurts subscribers with unfair charges and sets the stage for higher data-usage prices in the future. "We see it as a rate hike dressed up as fancy PR," said Joel Kelsey, a spokesman for the Consumers Union.

The new plans will lower the cost of an entry-level voice and data plan for smartphones by $15, to $54.99. Mr. de la Vega said the lower rate should bring in customers deterred by current smartphone plans.

AT&T is also dropping the $30 unlimited-data option for new iPad buyers and replacing it with the $25 a month, 2-gigabyte plan. The move follows warnings from analysts that data usage by iPad customers could weigh heavily on AT&T's network. The carrier has sold a lot of the $30 plans, and early adopters have been heavy users, Mr. de la Vega said.

The company is hoping customers will shift their data use to more-robust Wi-Fi networks, where unlimited use will be free under the plans.

AT&T is scrambling to improve its network in New York and San Francisco, two cities where the crush of data use from the iPhone has hurt call quality. The company believes 3% of its subscribers account for 40% of its data traffic.

The network difficulties are a concern for Apple, an important partner for AT&T, still the exclusive carrier of the iPhone in the U.S. Apple CEO Steve Jobs, speaking at the All Things Digital conference Tuesday evening, said the carrier has made progress but has more to do.

"They're doing pretty good in some ways, and in others they could do better," Mr. Jobs said. "I wish they were improving faster… [but] I'm convinced that any other network, had you put the iPhone on it, would have had the same problems."


AT&T spins it a different way in their announcement. They paint it as saying the customers money. At $10 to $15 for each additional 1GB for bandwidth it can get pretty expensive for some users.


AT&T Announces New Lower-Priced Wireless Data Plans to Make Mobile Internet More Affordable to More People

Dallas, Texas, June 02, 2010

AT&T*, the U.S. smartphone leader, today introduced new wireless data plans that make it more affordable for more people to enjoy the benefits of the mobile Internet. Customers can pick the new data plan that best meets their needs – either a $15 per month entry plan or a $25 per month plan with 10 times more data. Current smartphone customers are not required to switch to the new plans, but can choose to do so without a contract extension.

"AT&T helps mobilize everything on the Internet – your favorite web sites, TV shows, music, games and social networks. Virtually everything previously done while sitting at a computer can now be done on the go," said Ralph de la Vega, president and CEO, AT&T Mobility and Consumer Markets. "To give more people the opportunity to experience these benefits, 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."

Each plan includes unlimited access at no additional charge to more than 20,000 AT&T Wi-Fi Hot Spots in the U.S. Customers can also use unlimited Wi-Fi at home, in the office or elsewhere if available. AT&T will also help customers manage their wireless data usage by sending free text messages after customers reach different usage intervals and by providing online tools, including a smartphone app that shows monthly usage information. 

The new wireless data plans – including a new tethering option – will be available beginning June 7.  Current AT&T voice and texting plans are unchanged.

More Choice

The new AT&T plans provide large amounts of data to enable people to enjoy their favorite online activities:

  • DataPlus. Provides 200 megabytes (MB) of data – for example, enough to send/receive 1,000 emails (no attachments), plus send/receive 150 emails with attachments, plus view 400 Web pages, plus post 50 photos on social media sites, plus watch 20 minutes of streaming video – for just $15 per month.**  This plan, which can save customers up to 50 percent off their wireless data charges, is designed for people who primarily like to surf the web, send email and use social networking apps. If customers exceed 200 MB in a monthly billing cycle, they will receive an additional 200 MB of data usage for $15 for use in the cycle.  Currently, 65 percent of AT&T smartphone customers use less than 200 MB of data per month on average.
  • DataPro. Provides 2 gigabytes (GB) of data – for example, enough to send/receive 10,000 emails (no attachments), plus send/receive 1,500 emails with attachments, plus view 4,000 Web pages, plus post 500 photos to social media sites, plus watch 200 minutes of streaming video – for $25 per month.**  Should a customer exceed 2 GB during a billing cycle, they will receive an additional 1 GB of data for $10 for use in the cycle.  Currently, 98 percent of AT&T smartphone customers use less than 2 GB of data a month on average.
  • Tethering. Smartphone customers – including iPhone customers – who choose the DataPro plan have the option to add tethering for an additional $20 per month.  Tethering lets customers use their smartphones as a modem to provide a broadband connection for laptop computers, netbooks or other computing devices. Tethering for iPhones will be available when Apple releases iPhone OS 4 this summer.   

With the new wireless data plans, pricing for a smartphone voice and data bundle now starts at just $54.99 per month for an individual plan, or $24.99 per month for an additional line on a FamilyTalk plan, $15 per month less than the price of the previous entry level bundle.

For new iPad customers, the $25 per month 2 GB plan will replace the existing $29.99 unlimited plan. iPad customers will continue to pre-pay for their wireless data plan and no contract is required. Existing iPad customers who have the $29.99 per month unlimited plan can keep that plan or switch to the new $25 per month plan with 2 GB of data.

Wi-Fi at 20,000 AT&T Hot Spots

The vast majority of smartphones that AT&T offers have built-in Wi-Fi, which lets the devices automatically switch from the wireless network to a Wi-Fi hotspot without prompting, making Wi-Fi even more convenient and easy to use. This enables customers to use Wi-Fi in the home, office and at public locations where available. Wi-Fi will generally provide consistently fast speeds and does not count against a customer's monthly data plan usage total. In addition, virtually all AT&T smartphone customers have access at no additional charge to more than 20,000 AT&T Wi-Fi Hot Spots in the U.S. Customers can get more information on how to use Wi-Fi and find the location of AT&T Wi-Fi Hot Spots at www.att.com/wifiaccess.

Monitoring and Managing Usage

To help customers easily check their data usage, AT&T has made the information readily available in a number of ways***:

  • Customer Text Notifications On Data Usage. When customers begin to approach their monthly usage limit, AT&T will send three text notifications – after they reach 65 percent, 90 percent and 100 percent of the threshold.  Customers will also be sent emails if AT&T has their email address.
  • Data Usage Monitoring. Additionally, customers with iPhones and other select devices can use the free AT&T myWireless application to check data usage. The application is available for download in several smartphone app stores. Also, AT&T customers can call *DATA# from their wireless phone to check their data usage for the current billing period. They receive a free text message with their usage information. Customers can also go online towww.att.com/wireless to see all of their usage information, past and present.
  • Data Calculator. The easy-to-use online data calculator enables customers to estimate their mobile data usage and get a better sense for which data plan is right for them. It's located at www.att.com/datacalculator.

Customers can learn more about the new plans online at www.att.com/dataplans, by contacting AT&T customer service at 1-800-331-0500, or by visiting an AT&T retail store.

AT&T expects these new data plans to have minimal revenue impact this year and to not affect previous guidance for 2010.

* AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc.

** Usage examples are estimates. Individual results will vary based upon customer's Internet usage patterns.

*** Customers will see their usage reflected in their tools generally within 15 hours or less of actual data usage.

Largest Wi-Fi network claim based on non-municipal company and owned and operated hotspots. An 802.11 b/g enabled device required.

About AT&T
AT&T Inc. (NYSE:T) is a premier communications holding company. Its subsidiaries and affiliates – AT&T operating companies – are the providers of AT&T services in the United States and around the world. With a powerful array of network resources that includes the nation's fastest 3G network, AT&T is a leading provider of wireless, Wi-Fi, high speed Internet and voice services. A leader in mobile broadband, AT&T also offers the best wireless coverage worldwide, offering the most wireless phones that work in the most countries.  It also offers advanced TV services under the AT&T U-verseSM and AT&T |DIRECTVSM brands. The company's suite of IP-based business communications services is one of the most advanced in the world. In domestic markets, AT&T Advertising Solutions and AT&T Interactive are known for their leadership in local search and advertising. In 2010, AT&T again ranked among the 50 Most Admired Companies by FORTUNE® magazine.

Additional information about AT&T Inc. and the products and services provided by AT&T subsidiaries and affiliates is available at http://www.att.com. This AT&T news release and other announcements are available at http://www.att.com/newsroom and as part of an RSS feed at www.att.com/rss. Or follow our news on Twitter at @ATTNews. Find us on Facebook at www.Facebook.com/ATT to discover more about our consumer and wireless services or at www.Facebook.com/ATTSmallBiz to discover more about our small business services.

© 2010 AT&T Intellectual Property. All rights reserved. AT&T, the AT&T logo and all other marks contained herein are trademarks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks contained herein are the property of their respective owners.

Cautionary Language Concerning Forward-Looking Statements
Information set forth in this news release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results may differ materially. A discussion of factors that may affect future results is contained in AT&T's filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update or revise statements contained in this news release based on new information or otherwise. This news release may contain certain non-GAAP financial measures. Reconciliations between the non-GAAP financial measures and the GAAP financial measures are available on the company's Web site at www.att.com/investor.relations. Accompanying financial statements follow.


Here is my usage since June 1, 2010. I've used nearly the new AT&T limit in 2 days. Thank goodness Sprint has an unlimited plan! 

Detailed usage

Billing Period
New minutes start in 28 days on 7/1!
Today (06/03 07:29 AM, CDT)
10%
6/1
6/6
6/11
6/16
6/21
6/26
6/30

Data/Others

Sprint Data (CARL BROOKS)
Used
1,777,117KB/ Unlimited
Remaining
Unlimited
Close

Key:

1MB = 1,024KB

1GB = 1,024MB or 1,048,576KB


The "minutes" category is based on the call start time, even if the call continues into another category.

Your actual usage may vary based on:

  • Recent usage
  • Shared minutes, mobile to mobile calls, roaming calls or data
  • If you haven't received your first bill yet

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