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AT&T Changes Data Plan Pricing, Adds Tethering
June 2, 2010 10:47 PM

Today, AT&T announced that it would be implementing a few changes to its data plan pricing structure. Although companies such as Verizon Wireless have hinted at tiered pricing before, AT&T’s decision to invoke such a strategy and dump all unlimited data plans is quite baffling. Also part of the announcement was a feature promised to iPhone users almost one year ago – tethering. Unfortunately, even that comes with a catch. Let’s start by taking a look at these new rates:

AT&T will be offering two data pricing plans: DataPlus offers 200MB for $15 and DataPro offers 2GB for $25. As for overage charges, AT&T plans to charge customers on the DataPlus plan an additional $15 for every extra 200MB of data and $10 per 1GB for those on the DataPro plan. While the cheaper plans may sound enticing, they aren’t. Current iPhone customers pay $30 for unlimited data, although there’s a little-known 5GB cap. Recent studies have shown that iPhone customers use a few times more data than the average smart phone users and those numbers are only likely going to grow as apps such as Skype, SlingPlayer, and YouTube become more popular. Even Hulu and Netflix are bringing their service to the App Store soon. Not to mention the almost inevitable announcement of video chat in the next iPhone. Those services are simply going to add to reaching that 2GB limit faster.

As for tethering, the new pricing is further concerning. Adding the feature costs customers $20, but it doesn’t include any data. The plan leeches off the existing 2GB DataPro plan. AT&T will simply be charging subscribers to access the data, which they are already paying for, from another device. Competitors such as Sprint, for instance, offer the Mobile Hotspot feature on the HTC EVO 4G for $30 per month with no data caps on both 3G and 4G networks.

While existing iPhone customers can keep their “grandfathered” plan without having to deal with the new data pricing structure, those who plan to enable the tethering feature will be forced to switch over. Leaving the current unlimited $30 plan for this seems counter intuitive, but only about 2 percent of users go over 2GB per month, so switching plans may not be such a bad idea. However, once you switch from the unlimited plan, you cannot go back and will be stuck using the tiered model. From AT&T’s perspective, the price cut makes sense because it decreases the average data plan costs. It does not, however, make sense to eliminate the unlimited data option.

AT&T could have avoided a lot of trouble by simply continuing to offer an unlimited data plan option. This would have kept the people who use a lot of data, happy . Unfortunately, they decided against that, instead opting to punish them. These new pricing plans will go into effect on June 7, in tandem with the release of the iPhone 4.

Links: AT&T Press Release

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