In a move that will eventually be copied (in some form) by other wireless (and possibly home broadband) providers, AT&T has moved to a tiered, usage-based data pricing for its smartphone devices.

The previous smartphone/iPhone/BlackBerry data plan, at $30 month, was for unlimited usage.   Going forward (current customers are not required to switch), purchasers of the will be able to choose a 200 MB DataPlus plan for $15/month or 2 GB for $25/month.   Those on the lower-priced plan who exceed their bucket will be charged $15 for an additional 200 MB.  Those exceeding the bucket on the higher plan will receive an additional 1 GB of data for $10. All plans include unlimited AT&T Hot Spot access on Wi-Fi capable devices.

MyRatePlan Comments

• For light users of data (emails with no attachments, web browsing), there is an opportunity to save up to 50% on the prior cost of smartphone data.   (AT&T claims 65% of its smartphone subscribers fall into this category).   Since all other national carriers have a required smartphone data plan of about $30, AT&T may have an opportunity to poach some of those customers
• At the same time, by grandfathering in existing customers with the unlimited plan, AT&T reduces the risk that those people will defect.   It is unclear if/when Verizon or another carrier will have the Apple iPhone, but this move may help AT&T retain those customers when the phone does become more widely.
• The overage pricing structure somewhat discourages taking the 200 MB plan, as the monthly cost doubles if that is exceeded.   It is also somewhat punitive that any excess doesn’t roll over to subsequent months, as AT&T does with its Rollover voice minutes.  If a user ends up going over their allowance two days before the end of the billing cycle, they will still be charged $15 even though it is unlikely they will utilized much of that data.
• For the heaviest 2% of users (those that AT&T says exceed 2 GB usage per month), the price for data will increase, perhaps sharply.   For example, someone that uses between 5 and 6 GB per month, will now pay $65, more than 100% increase.  As we mentioned earlier, existing smartphone customers can keep their unlimited $30 plan, so initially this will impact a small number of people.  In fact, this may be a tacit effort to get prospective new customers who would tax their network to go somewhere else.  At some point, when AT&T’s network fully catches up to the exponential use of data, we would expect the carrier to introduce at least one new high allowance tier, to be perceived as more welcoming to heavier users.
• The other quirky thing about the new data pricing is that AT&T is now the only carrier where a smartphone rate plan can be cheaper than a quick messaging phone rate plan.   AT&T voice rate plans start at $39.99, making the lowest monthly cost on a smartphone plan $54.99 ($39.99 + $15 data plan).  However, that minimum cost is $59.99 for quick messaging plans, as those require at least $20 of some combination of messaging and non-smartphone data plans.   Given how profitable text messaging is for carriers, this non-competitive high minimum monthly cost (vs. other carriers) in this category is somewhat surprising.

For those in the market for a family plan today, T-Mobile is waiving activation fees on 2 or more lines.    Unfortunately this offer is for today only.

AT&T is also waiving activation fees through the rest of May.  That’s a savings of $36 on one line and up to $150 on a five line family plan.  (As of now (5/10), this includes the iPhone.  However, we’re not sure if AT&T is including the iPhone in the program all the way through May.

To compare all cell phone plans, and find the one that will cost you the least each month based on how you use your phone, visit our CellCalc page.

AT&T and Verizon have lowered their unlimited pricing to $69.99/month, $89.99 for unlimited voice & text, $99.99 for unlimited voice, text and data.   Similar decreases are also in effect on the family plan side, where two unlimited lines are $119.99 vs. the previous $199.99.   This is a decrease of about 30% for a single line, 40% for a family plan. Verizon also reduced its 2,100 minute plan to 2,000 minutes, and cut the price by $10.  The carriers are allowing customers to change to these rate plans with no penalty or contract extension.

• If your rate plan is more than the above amounts, contact the carrier directly to switch, subject to the exceptions in the list below.   For customers who have gotten a rate plan in the last couple years, most people on a 1,350 minute or unlimited single line plan will benefit, as will most on a family plan higher than 2,100 minutes.  Verizon customers on a 2,100 minute plan who don’t use more than 2,000 minutes can save $10 a month by switching to the 2,000 minute family plan.

1. If your carrier is AT&T and your phone is a ‘quick messaging’ device (basically a non-smartphone with a QWERTY keyboard) and you do not currently have text and/or data bundle, AT&T may make you add some combination of these these that totals $20 or more per month ($30 for a family plan).   That would reduce or eliminate your savings.
2. If your carrier is Verizon and your phone is a 3G multimedia device (currrently LG enV Touch, Samsung Rogue, LG Chocolate Touch, LG enV3, LG VX8360, Motorola Entice, Nokia Twist, Samsung Alias 2), and you do not currently have a data plan, Verizon may make you add a $9.99 data plan (for each of these phones on the plan).  That would reduce or eliminate your savings.
3. If you are in the final two months of your contract or your contract is over, MyRatePlan can help you get a substantially discounted phone if you renew your contract online.    This is regardless of the rate plan you are currently on, but is subject to the requirements above.  AT&T offers ||  Verizon offers

Starting September 6, new AT&T customers who purchase a smartphone or BlackBerry, as well as existing AT&T customers that upgrade to one of those devices will be required to purchase a $30 data plan with their phone.   This requirement puts AT&T in line with the other major carriers, all of whom have had this requirement for a while (although pricing varies by carrier).   Until now, AT&T had only required a data plan for the iPhone, one that is built into a separate series of plans available for that device.

MyRatePlan Analysis: The impact is likely to be fairly small, as most people who purchase a high end device would likely purchase data service to take full advantage of the features.  However, future customers (and those upgrading) who are mainly interested in having one of these phones for texting via the QWERTY keyboard may choose to instead purchase one of the many “quick messaging” phones offered by AT&T.  These will not require a data plan.    On the business side of things, BlackBerry may see a slight reduction in market share of AT&T’s business if customers forgo those devices to avoid the data plan.

This special offer from AT&T expires March 22nd at midnight.   You must use this link or click the image below to get to the promotion. The link goes to the touch screen LG Vu; you can browse and switch to a different phone.

Details:   Order a new line of service with a two-year contract from AT&T and receive an automatic activation credit from AT&T.   No activation fee applies for up to a 5 line family plan.  You could save up to $140!     Must be new contract service.   Contract renewals,  upgrades, prepaid, add-a-line do not qualify.  Apple iPhone is ineligble.

AT&T Waived Activation Fee

In our prior post we spoke about the free cell phone insurance benefit available with the new AT&T Universal Savings & Reward Card. That feature applies regardless of carrier.

However, for AT&T and former Cingular customers, there is an even better benefit. The card will reimburse you up to 10% of the cost of AT&T products and services, including your wireless phone bill, for 12 months; 5% thereafter.

The AT&T Universal card has no annual fee and offers a 0% introductory APR on balance transfers for 12 months. To apply, click here.