AT&T’s new service plans – you know, the ones that limit data usage – went into effect Monday, the same day Apple unveiled the iPhone 4. (Coincidence? I think not.)
The move seemed to confirm long-standing speculation from wireless industry insiders that a move towards tiered data plans was not only necessary, but inevitable. After all, how long could unlimited plans last given the massive discrepancies between average subscribers and gluttonous data hogs?
However, don’t expect to see other carriers rushing to follow AT&T’s lead. Sprint, Clearwire and T-Mobile all told Wireless Week that they have no plans to put data caps in place and Verizon Wireless declined to comment.
Their reasons are obvious: Consumers are used to all-you-can-eat plans, and putting them on a data diet – even if they’re still consuming the same amount of content while paying less money – could result in some disgruntled subscribers.
The other carriers are probably waiting to see if AT&T’s move results in a consumer backlash before venturing forth with capped plans of their own. AT&T is essentially running a test; its competition will wait to see the results before making moves of their own.
AT&T has to convince consumers that cheaper, capped data plans are a better deal than pricier, unlimited plans. It’s beginning that process by educating consumers about their data usage. As many in the industry have pointed out, it’s easy for consumers to gauge how many voice minutes they’ve used. A 30-minute phone call uses up 30 minutes on their service plan. Data usage varies widely. Sending an email uses up a tiny fraction of the capacity it takes to watch a brief video clip on YouTube.
AT&T has launched automatic notices that send out a text message and email after subscribers reach 65 percent, 90 percent and 100 percent of their monthly data allocation. Subscribers also can check their online accounts, download usage apps to their smartphones or dial *3282# to have AT&T send them a text with their usage numbers.
AT&T says the 2 GB data cap now in place for its DataPro users is enough to send/receive 10,000 emails without attachments, send/receive 1,500 emails with attachments, view 4,000 Web pages, post 500 photos to social media sites and watch 200 minutes of streaming video every month. That’s a lot of content: Only 2 percent of AT&T’s subscribers use upwards of 2 GB per month.
The key to getting consumers to accept AT&T’s new data plans will be education. The new data plans really are a better deal for most of AT&T’s customers, many of whom have been unwittingly subsidizing data gluttons through their $30 unlimited plans.
AT&T needs the new plans to be a success. The carrier is trying to mitigate the impact of data hogs on its network, which supports every iPhone dating back to 2007, a multitude of other smartphones, USB modems, M2M devices and the iPad. It’s a challenge shared by Verizon and one that may eventually come to other carriers if their subscriber numbers pick up.
Tiered pricing is good for most consumers. If AT&T can make it work for its network, tiered pricing could be good for the wireless industry, too.
