AT&T Discontinues Unlimited Data Plans

AT&T has announced on Wednesday discontinuance of unlimited data plans on its high-end smart phones and iPads from Monday next. With this, the Dallas-based telecom major will become the first company in the wireless industry to have a usage based tariff structure.

The decision will apply to new connections only. The existing users can continue to renew their unlimited contract as before. However, if they choose to migrate to the new usage based plans, they will not be able to revert back. iPhone customers who would like to share wireless internet of their device with another computer will have to switch to the new plans and pay a $20 add on fees.

This is a much anticipated move and it is just a matter of time that other stake-holders like Verizon and Sprint would follow the suit, said a telecom industry expert. However, T-Mobile and Sprint Nextel, in an immediate reaction, used AT&T announcement as an opportunity to highlight their unlimited plans.

A bundle of 450 minutes of voice, unlimited download and unlimited video, picture and text messaging from Sprint costs $69.99, as compared to $74.99 in AT&T’s new plans. An almost similar bundle from T-Mobile costs $54.99. The discontinued unlimited data plan from AT&T cost $30 per month.

While the decision will affect users of smart phones, like AT&T iPhone, who like to stream video and audio extensively on their device, it will actually result in marginal savings for a majority of users. In fact, as much as 40 percent of wireless bandwidth is accounted for by merely three percent of smart phone users, making a strong logic for usage based tariff structure.

Monthly data usage of 65 percent of AT&T smart phone customers is 200 MB or less, a company executive said. High volume traffic by a limited number of customers causes a clogged network, drawing frequent complaints from the customers in big cities. With the imminent release of Apple’s multi-tasking iPhone, the situation was set to become worse.

The new tariff structure will make smartphone data more affordable to customers, maintained AT&T. DataPlus, which is an entry level plan, would cost only $15 per month for 200 megabytes download. Two hundred megabytes of data is enough to view 400 webpages, open 1,000 emails and stream 20 minutes of video from YouTube. According to AT&T, this volume is good enough for 65 percent of users. Additional usage would be charged at the rate of $15 for 200 megabytes.

DataPro, a higher level plan, would cost $25 per month and would allow 2 gigabytes download. Users can access data over and above of the allowed limit by paying $10 for each gigabyte. DataPlus users can switch to DataPro without paying any penalty. The telecom major will provide users with tools to keep track of their uses and also send them text alert after certain levels are reached.

The new data tariff is not applicable to basic phones, netbook computers with 3G access or laptop cards for wireless Internet. However, it will apply to 3G versions of Apple’s iPad Touchscreen Tablet Computer.

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