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AT&T boosts mobile data caps but hikes prices as well

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On Sunday, AT&T(s T) is reconfiguring its mobile data plans in a way that will anger many customers but may actually please others. It’s raising its smartphone and tablet data plan rates, while simultaneously offering customers a better deal on the data they do consume. The operator’s $15 / 200 MB and $25 / 2 GB are plans are going away for new subscribers, replaced by a $20 plan with 300 MB and a $30 plan with 3 GB. The bottom line is all new customers will pay more every month for data, but they will also pay less per megabyte.

AT&T will also offer an additional 5 GB high-volume smartphone plan for $50 a month, which includes tethering and mobile hotspot use. For tablets, AT&T will offer the same $30 and $50 tiers as it does for smartphones, though without tethering, and it will keep its $15 / 250 MB plan in place. The same $10 per gigabyte overage fee will remain in effect for all of the higher-tier plans, though its rather discriminatory policy toward data excess on its lowest-tier plans will persist. Customers with the $20 / 300 MB plan will have to pay another $20 to get another mere 300 MB. All existing unlimited customers on the old capped and unlimited plans are grandfathered in (though throttling will remain in effect for unlimited), but existing customers can switch to the new pricing tiers if they wish.

There’s a way to look at this as a positive. AT&T is actually lowering the per-MB cost of data as mobile Internet and app use skyrockets. That’s a trend that needed – and still needs – to occur if operators are to keep ahead of the increasing bandwidth demands of smartphones and tablets. AT&T still isn’t as cheap as Sprint(s S), which is still holding on to unlimited plans, and T-Mobile, which offers gobs of data for dirt cheap prices, but it’s definitely undercutting its primary competitor, Verizon Wireless(s Vz)(s vod), which offers 1 GB less for the same price on the most popular $30 plan. Unless operators want mobile broadband innovation to go stagnant, pricing-per-megabyte will have to fall further.

Make no mistake about it: AT&T may be smoothing over the edges, but this is most definitely a price hike. Some of AT&T’s current customers may switch over the plans by choice, particularly customers that often go just over their current 200 MB or 2 GB caps each month. But AT&T will be collecting $5 more month from all new customers. That’s going add up to a hefty pile in AT&T’s coffers, and most customers won’t be happy about it.

10 Responses to “AT&T boosts mobile data caps but hikes prices as well”

  1. bornabub

    This is extra worthless for people who can access wireless. I use at&t because nobody else offers good reception in my area. I’ve never used the data in my plan, but I still have to pay for it. My phone just connects to wi-fi, and the data plan is useless. I’ve come to the conclusion that smart phones are mostly useless functionality with a couple of conveniences. What’s frustrating is that you’re forced to buy all the useless stuff to get the couple of convenient features.

    • Kevin Fitchard

      Hi bornabub,

      Yep, you’re the exact type of user that really gets nailed by this price hike. At least you’re grandfathered in so you don’t have to pay the additional $5 a month.

      I’m a little embarrassed to admit this since I cover wireless, but I don’t use that much data on my smartphone. I tend to use a lot of messaging services and social networking tools and do a fair amount of browsing, but I keep most of the high-bandwidth stuff on Wi-Fi.

      That said, I long passed the point that a 200 MB plan could meet my monthly needs. My T-Mobile bill regularly ran over my cap by 50 MB a month or so. I think a lot of people are in the same boat so an additional 50 MB headroom may save a lot of people from moving up to 3 GB plan. Still, for a lot of low-volume users 300 MB still isn’t going to cut it. They’ll have to bump up to mid-tier plan and they’ll have to pay $5 more a month for it now.

  2. iPads are completely on their own for data. That way you are not stuck in a contract, you pay as you need it. Apple was smart to not tie the iPads to contracts and scum like at&t and Verizon.

  3. So I will save $20/month by staying with T-Mobile where I now pay $30 for 5 GB of data.

    Is this due to the failed take-over of T-Mobile? They need more money to pay for development of their infrastructure?

    Or is this to get people to go out and buy their new phones and iPads before Sunday?

  4. I’d rather prepay Clear $50/month and get unlimited 4G. Their mobile hotspot tethers with anything and can run for six hours on a charge. It’s 2012 people – time to ditch data caps and overage charges.

    • Kevin Fitchard

      Hi Luscious,

      I’m not sure how long that’s going to last though. Sprint and Clearwire are hanging on to unlimited to differentiate themselves, but after a while the economics of unlimited don’t work unless they start hiking up the price of data plans.

  5. This is terrible. Sooner or later I’ll want to change my plan for a month to do some tethering with my iPad while on vacation, and AT&T will tell me that “if you give up your existing plan, you can’t go back.” So now they want $5 more for the same data I use each month. At least they could of waited until the iPhone comes out with 4G LTE.

  6. Matt Athayde

    you know if they just threw in an extra tier or 2 instead of bumping everything people would probably be happier. I mean really? 200mb and the next step is 2gb, now 300mg/3gb. why do we need a 1:10 ratio? how about a 1:5:10 ratio there at least.

    • Kevin Fitchard

      Hi Matt, thanks for commenting

      Or if AT&T really wanted to be egalitarian about. Why not charge people $5 for the data connection and then purchase their data by the GB or in 100 MB bundles. The fast that there is 10X data differential to a .5X price differential is what strikes me as so ridiculous.