AT&T Shuts Down the Mobile Broadband Buffet by Ending Flat-rate Mobile Plans

AT&T today revamped its data offerings for both smartphones and Apple’s iPad 3G with plans that cost less but also limit monthly data. In other words, as of June 7, the all-you-can-eat pricing for iPhone data plans goes out the window.

Current customers can keep using the plans they already have, but new customers will have to choose either a 200 MB or 2 GB data plan for their smartphone or iPad 3G. Smartphone tethering is an additional fee option for the higher-capacity plan and applies to the iPhone upon Apple’s upcoming release of iPhone OS 4. AT&T will provide software and text message tools to help customers meter their data usage for both. Here’s a rundown of the new monthly plans, both of which include unlimited Wi-Fi at AT&T’s 20,000 hotspots:

  • DataPlus — 200 MB of data for $15, which equates to $75 per GB. Customers that exceed the data cap will pay an additional $15 for another 200 MB.
  • DataPro — 2 GB of data for $25, which works out to $12.50 per GB. Customers will pay $10 for each GB over the cap in a given month.
  • Tethering — $20 per month for smartphones, on a DataPro plan. This option does not provide additional data — it uses the 2 GB provided for in the DataPro plan.

The move comes less than a week after Verizon said it would move to a tiered pricing model for its next-generation LTE network. But AT&T isn’t waiting for a new 4G network to make the pricing changes. Instead, the carrier is adopting the model for its 3G network on June 7  — the exact day the next data-hungry iPhone is expected to launch  —  as a means to help shape the way consumers use its network. Meanwhile, T-Mobile will throttle back bandwidth, so its customers won’t pay overages for additional data. Instead, they will give up the convenience of fast mobile data after racing past the data plan cap.

Customers used to current unlimited smartphone data services are likely to cry foul over the new plans on cost-per-GB basis. But that argument is invalid on an unlimited plan because the per-unit data cost varies on a monthly basis — the price is fixed, but usage is not. And research indicates that customers paying $30 a month for AT&T’s current unlimited smartphone plan will save money and still have their needs met by the new $25 plan for 2 GB of smartphone data.

AT&T says that 65 percent of its smartphone users use 200 MB or less each month on the 3G network and 98 percent use under 2 GB. Is that marketing fluff? Perhaps not. Chetan Sharma, a wireless analyst, estimates that data card users consume on average 2 GB a month, while superphone users consume about 500 MB, so AT&T’s estimates sound accurate. And our own recent poll at jkOnTheRun — a community of die-hard mobile enthusiasts– shows similar results: 80 percent of respondents use 2 GB or less of data on their smartphone, and many of those that exceed the 2 GB threshold do so because they tether their smartphone for data usage. My own monthly data usage on T-Mobile’s network with a Google Nexus One routinely tops out at the same 500 MB that Sharma estimates.

While most smartphone users won’t suffer from AT&T’s new tiered data plans, those who own Apple’s iPad 3G model will. Due to the larger display and affinity for content consumption, iPad users are likely to consume much more data than those on a smartphone — three times more bandwidth-hungry video on the iPad than on other devices, to be exact.

Unfortunately, today’s mobile data networks have a fixed capacity, so carriers have to adopt one or more new models to help manage network use. Otherwise they’d be offering the equivalent of an all-day buffet that runs out of food by lunch.

Related GigaOM Pro content (sub req’d):

Metered Mobile Data is Coming and Here’s How

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