AT&T, the second-largest U.S. wireless carrier is introducing service plans aimed at families that use lots of data, cutting $40 a month from premium users’ bills.
Under the new offer, families with four smartphones can pay $160 a month for 10-gigabits of shared data, unlimited calling and text messaging, the company said in a statement. A similar package under AT&T’s previous plan would cost $200, and Verizon Wireless charges $260 for the same plan. The offer requires no contract, and phones must be purchased at full price either up front or in installments.
The move is an escalation of competition in the mobile market where AT&T and T-Mobile US Inc. have run back-and-forth attack ads and offered $450 in credit to entice customers to switch service providers.
“This is about being competitive,” said David Christopher, chief marketing officer for AT&T Mobility. “We feel we have the best network and the best value in the marketplace,” Christopher said.
The changes represent AT&T’s latest effort to get customers to pay more overall by upgrading from lower-use plans. In some cases, families will actually pay less if they upgrade. That family of four, for instance, already pays $170 monthly for a 4 gigabyte plan and $180 for 6 gigabytes. If they upgrade, they will pay just $160. But for the most part, more data means more revenue for AT&T.
The offer also could encourage people to add tablets to their accounts, as those consume even more data and would quickly use up allotments in the lower-use plans.
The new rates will also help AT&T wean people off subsidies on new phones. Instead of having people buy phones for $100 or $200 and having the true cost baked in to monthly service fees, AT&T and other carriers have been encouraging customers to pay the full price for phones outright or in installments.
Many people are already doing that, through programs such as AT&T’s Next, even though in many cases, it’s actually cheaper for people to use the subsidies for high-end phones as long as they keep their phones for two years or longer. Christopher said many customers prefer the flexibility of being able to upgrade as soon as Apple or Samsung releases a new model. Subsidized plans typically require customers to wait two years.
AT&T will let existing subsidized customers take advantage of the new rates, but when they are eligible for an upgrade, they must pay full price for the phone – outright or in installments – to keep the lower rates. New customers won’t be eligible for subsidies to get these rates.
T-Mobile, based in Bellevue, Washington, has gained 2.1 million monthly customers in the past three quarters. This is a reversal of its 2012 performance, fueled by a switch to no- contract plans and quicker phone upgrades and payment financing. The gains at T-Mobile have helped slow AT&T’s user growth. Earlier this week, the Dallas-based carrier said it signed up 566,000 contract wireless customers in the fourth quarter, compared with 780,000 a year ago.
All existing AT&T customers sharing 10-gigabits or higher will automatically be placed on the new plan, said Fletcher Cook, an AT&T spokesman.
