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The Internet Overcharger’s Numbers Game: AT&T Raises Prices on Smartphone Data Plans

Phillip Dampier January 19, 2012 AT&T, Competition, Data Caps, Wireless Broadband 4 Comments

AT&T has announced an across-the-board rate increase for smartphone and tablet data plans, raising prices $5 Sunday for most plans while including incrementally larger usage allowances:

  • Lite Usage: 200MB for $15 is now 300MB for $20;
  • Average Usage: 2GB for $25 is now 3GB for $30;
  • Higher Usage: 4GB for $45 is now 5GB for $50.
  • Regular Tablet Plan:  2GB for $25 is now 3GB for $30.
  • A new, higher use tablet plan will offer 5GB for $50.
  • Overlimit fees are now $20 for 300MB of additional usage on the lite usage plan, $10/GB on all other plans.

AT&T originally charged $29.99 for unlimited-use data plans.  The company claimed in the summer of 2010 its new limited-use plans would save most customers money, but except for very light users, that is no longer true.

AT&T's throttles are engaged.

AT&T says the new usage allowances reflect customer resistance to paying overlimit fees when they exceed AT&T’s existing caps.  But the company has also previously said the vast majority of its customers never exceed the old allowances. According to AT&T, 65 percent of its customers use less than 200MB per month and 98 percent of its smartphone customers use less than 2GB of data per month. That effectively means every customer will now face a $5 rate hike for increased usage allowances most will not currently use.

Existing customers can hang on to their old data plans indefinitely, but those who bounce between carriers will be forced to choose from a more limited, and expensive, menu of options.

Considering that AT&T’s most significant rival Verizon Wireless currently charges $30 for just 2GB per month, AT&T officials are still able to claim their new prices represent a “great value.”

Customers grandfathered under AT&T’s old unlimited-use plans are also discovering they are anything but unlimited.  So-called “heavy users” who exceed 2GB of use per month are first warned by AT&T they are in the “top 5%” of usage-hungry users, after which their wireless connection is throttled to as little as 15kbps for the remainder of the billing cycle.

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Damian
Damian
9 years ago

They need to pay for that failure to merge with Sprint somehow.

Dave Hancock
Dave Hancock
9 years ago
Reply to  Damian

With Sprint???????????????

I thought that it was T-Mobile!

Scott
Scott
9 years ago

That was the t-mobile deal they lost 4 billion on that they need to pass the costs on to customers for. So now that people are starting to see what happens when you let these companies go from unlimited internet to metered and then they frame the discussion around you fighting over a few megs or gigs and not the real question of why they need $20-50/mo for bandwidth that costs pennies per Gb even after their tower and backhaul costs. This is after AT&T also changed their texting plans to counter Apple’s free imessage texting, making texting plans “streamlined”… Read more »

bill
bill
9 years ago

This is outrageous. Please stop ripping the customers. Amricans pay 10th times more on the cell phone than rest of the world. And we do nothing but watch them steal our wallets.

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