AT&T No Longer Offering Unlimited Data: A Nightmare for IPad Users

According to the AT&T press release on June 2, 2010, AT&T will no longer offer unlimited data plans to new smartphone or iPad customers. Instead, the company will offer two different data plans ranging in price from $15 to $25 monthly. The two new plans offer either 2GB ($25) of data usage or 200MB ($15) of data usage monthly.

Why would AT&T cancel unlimited data options?

The press release states that less than 2% of all customers use more than 2GB of data per billing cycle. The new data plans will offer a less expensive alternative to the status quo, and will allow for more smartphone users. AT&T is looking to expand its wireless service to more customers by offering less expensive rates.

Capped data plans are a bad idea for iPad users

When purchasing my 64GB iPad I had the choice between the 3G + Wi-Fi model, or the Wi-Fi only model. I choose the Wi-Fi only model due to price and availability. However, if the 3G model was available I may have purchased it in order to access the internet anywhere that AT&T data coverage was present. The capped data plans are horrible news for iPad users who can use their device to access high data sites such as Netflix, which provides members streaming video on demand. For instance the highest data plan, DataPro (2GB) would only be able to play three hours of streaming video, whereas the other data plan, DataPlus (200MB) would only be able to play 20 minutes of steaming video.

Will the new plans really save consumers money?

From personal experience, I rarely use over 200MB of data per month on my BlackBerry smartphone. The new data plan would save me and other consumers who do not use their phone for extensive web surfing about $15 per month on our cell phone bill. However, how many of us want to worry about going over our monthly data rates and paying an additional $10 for the DataPro plan for every 1GB over and $15 for the DataPlus plan for every 200MB over? The new billing adds confusion and budgeting for data use, which is not something most cell phone users want to think about during their billing cycle.

Is this a smart business move and what else is AT&T offering with the new plans?

As an economist and technology geek, I do not think the capped data plans are a smart move for AT&T. Consumers will opt for Android and BlackBerry based phones on the other three major cell phone networks (T-Mobile, Verizon, and Sprint) for unlimited access to data. If AT&T wanted to save smartphone users money, especially in the iPhone market, they would offer a tethered data and texting plan. The current data and texting plan on separate purchases and can run, on average, $30 and $15 respectively. However, AT&T is now offering free Wi-Fi at over 20,000 AT&T Hot Spots, and is now allowing tethering from smartphones to laptops or netbooks for an additional $20 per month.

Bottom line

Capping data rates is a smart move on AT&Ts part for expanding access for more consumers; however, it hurts iPad and heavy data usage customers. For those of you that purchased iPad devices with built in 3G, you will be paying more money for less data. To find out more about the new data plans and to calculate how much data you would need under the new capped plans, please visit AT&Ts website at, www.att.com/datacalculator.

Sources:

Personal experience

http://www.att.com/gen/press-room?pid=4800&cdvn=news&newsarticleid=30854