Blog Post

AT&T May Love M2M, But Show Me the Data Plans

att_header_logoAT&T (s T) said today that it will provide wireless service for an eagerly anticipated e-reader from Plastic Logic, and that it’s inked an agreement with Jasper Wireless to provide 3G service to a variety of consumer devices such as cameras and navigation systems in cars. The two announcements, in light of the carrier’s stated goal of providing wireless service to a variety of devices as a way to boost revenue and profits, has folks all abuzz. But when it comes to the success of these efforts, the proof is in the payment plans.

So far AT&T has not disclosed pricing plans for its machine-to-machine (M2M) efforts, but to succeed it will have to offer a range that goes beyond its current offers of 5 GB for $60 or 200 MB for $40. Glenn Lurie, the executive in charge of M2M at AT&T, outlined to me back in June a variety of possible plans — from day passes to prepaid cards — that basically allow AT&T to charge a small fee each time someone sends a photo from their digital camera to another person using the 3G network. He also told me:

“If you had asked me five years ago if we would be doing this, you may have gotten a different answer,” Lurie said. “The goal of finding this incremental revenue is to make money. There is a lot of baggage around average revenue per user (ARPU), but these incremental revenues may bring in $1 per subscriber per month at 50 points of OIBDA [margin] on that dollar.”

Specifically, AT&T wants to use M2M to make money on its newly deployed HSPA network. But it lags other carriers that have already started providing wireless service to myriad devices (see our story from June for some fun examples) on their 3G networks. Sprint (s S) sells access to its network to Amazon (s amzn) for its Kindle, while T-Mobile has a program in place to provide wireless access to smart meters. In other parts of the world, Vodafone yesterday said it was launching a platform to provide M2M connectivity. So as AT&T joins the wave of carriers touting M2M, it still has to develop a pricing plan that can generate profits by getting consumers to connect.

4 Responses to “AT&T May Love M2M, But Show Me the Data Plans”

  1. Consumers aren’t idiots anymore. This is a weak cover for overcharging users for data plans. I have yet to see a concise explanation of why I have to pay $30-40/month for 5Gb data at ridiculously slow speeds.

    Why AT&T even bother’s with these press statements is even beyond me when they can’t even ensure Visual Voicemail works reliably for existing iPhone customers or why most of the time I cannot get 3G signals and must fall back on Edge using my iPhone 3G. Lets not forget that you cannot even trust your iPhone Data meter when using an International Data Roaming plan as Leo Laporte of found out on his recent trip to China and was stuck with a $750 bill to no fault of his own.

    AT&T is just completely out of touch and does not realize their level of incompetency. You would think they would have learned from their partnership with Apple that user experience is everything in today’s economy and their’s sucks!