Wednesday, June 2, 2010

AT&T adds smartphone price options

NEW YORK — AT&T, wireless provider for Apple's iPhone, on Monday will become the first major mobile phone company to stop offering new smartphone customers a single monthly price for unlimited Internet access — likely presaging an industry shift to charges based on how much people use their phones to access videos, music and data.
AT&T expects the new pricing to boost sales. "Some customers, up until now, have been hesitant to sign up for a $30 monthly data plan" for unlimited access, said Ralph de la Vega, CEO of AT&T Mobility and Consumer Markets. Existing customers can switch to the new pricing or keep their current all-you-can-eat service.

Newcomers will have two options: Under the DataPlus plan, subscribers can pay $15 a month for 200 megabytes of data; that would handle about 400 photos or 100 minutes of streaming video. The DataPro plan offers
10 times that capacity, 2 gigabytes, for $25.

AT&T will send text alerts to customers near their limits. DataPlus customers who go over will be charged $15 for an additional 200 megabytes. DataPro users will pay $10 for an extra 1 GB.

AT&T says 65 percent of its smartphone customers use less than 200 MB a month, and 98 percent use less than 2 GB.

But, largely because of the success of the iPhone, AT&T "has the most loaded and most used data network in the U.S.," said Roger Entner, head of telecom research at Nielsen.

And just 3 percent of AT&T's smartphone customers account for as much as 40 percent of its data traffic, contributing to slow transmissions and dropped calls. AT&T must control heavy users, or at least get them to pay more, Entner said.

Similar plans may arise

With the limited airwave spectrum available for wireless broadband, he said, it's just a matter of time before other providers — including Verizon, Sprint and
T-Mobile — switch to usage-based pricing.

Verizon Wireless CEO Lowell McAdam said last week that it would "make sense" to have such pricing later this year when his company introduces a speedy 4G service.

Apple's new iPad tablet also uses AT&T's wireless service. The new pricing will offer those customers
2 GB for $25 a month; current customers can keep their unlimited service offer for $29.99 a month.

IPhone customers who pay an extra $20 a month soon will be able to use the phones to provide Internet connections for laptops or other devices. That process, called tethering, will be available on 3G iPhones this summer when Apple releases a new operating system, AT&T said.

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