AT&T Shakes Up Data Plans, But At What Cost?

In the first significant shake-up of the mobile data market, AT&T has revamped data plan offers for smartphones and tablets. The general impact of the changes (to be launched on Sunday) is to increase the general bucket sizes that customers must purchase (with a price increase to go along with it).


The current smartphone data plans are 200MB ($15), 2GB ($25), and 4GB ($45), the latter including hotspot tethering. The new plans raise the stakes in terms of data and price, with 300MB ($20), 3GB ($30) and 5GB ($50), again, with the latter plan including tethering.

So why the change? According to AT&T, the change reflects the increased consumption by consumers with their smartphones and tablets. In other words, we need more data. If the argument holds true, then the pricing is a benefit, with the new plans offering cheaper pricing per GB. But on the downside, if we don’t need more data, then the new plans make the jump into smartphones just that bit more expensive, especially with the lack of those often talked about family data plans still conspicuously absent.

NPD Connected Intelligence tracks data consumption on Android smartphones through an on-device meter. Average cellular data tracks comfortably under 2GB on average (and typically averages out at 1GB per month). This is not to say that consumers are not pounding data on their smartphones, but we find that Wi-Fi use far outweighs the cellular consumption. 

And for those that do exceed the old 2GB point, AT&T offered a reasonable $10 for an additional 1G. The downside of the new price points is that three is an increased barrier to entry, particularly for tablet plans, which are also now priced at $14.99 (250MB) $30 (3GB) and $50 (5GB). Our research shows that not only are the majority of tablet users not leveraging cellular connections, but that an increasing number of tablet users are choosing Wi-Fi only (65% are Wi-Fi only now, compared to 60% in April 2011).

But in fairness to AT&T, their plan has some merit: Verizon Wireless also charges $30 for its primary smartphone (and tablet) data plan, but provides just 2GB for that price. So perhaps AT&T’s real trick here is at least to provide pricing parity and let the consumers easily see what you get (or not) for the price point, offering a whole additional 1GB. So be it, but neither company is likely to see a major upswing in tablet users as a result.