AT&T
NEW YORK -- AT&T is following bigger rival Verizon Wireless with a new type of family plan that comes with a four-fold increase in its fees for data services such as mobile Internet.

But, unlike its rival, AT&T (T) says the plan will be an option rather than a requirement for new customers and subscribers upgrading to a new phone.

Late in August, AT&T, the No. 2 U.S. mobile provider, will launch the new offering, which allows its customers to buy a single data plan for up to 10 devices and includes unlimited phone calls and text messages.

Under the plan, the company's data price could be quadruple its current fee. For example it will charge $40 for 1 gigabyte of data per month, compared with its current rate of $30 for 3 gigabytes.

The hope is that the new plan, similar to one kicked off by Verizon Wireless (VZ) in June, will entice individuals and families to connect more devices such as tablet computers to the AT&T network because they will no longer have to buy a separate monthly data allowance for each mobile device.

Since young consumers are making fewer phone calls in favor of communicating via data services, AT&T, like Verizon Wireless, is overhauling its pricing in a bid to boost revenue from data services and to avoid a future decline in voice revenue.

Pivotal Research analyst Steve Sweeney expects the plans to increase overall revenue over the long term though it may reduces average revenue per customer slightly in the short term.

"AT&T and Verizon are both changing their pricing structures to maximize their long-term revenue growth based on where the highest growth in demand will be coming from," Sweeney said, referring to growing demand for data services.

And AT&T's move to offer the new plan as an additional choice could work in its favor, Sweeney said.

"You really can't alienate people by giving them another option," he said. "AT&T's approach is a little smarter."

Buying in Bulk

AT&T hopes the new plan leads people to buy data in bulk because the bigger the data plan, the cheaper the per gigabyte rate. A customer who wants 20 gigabytes of data, would pay $200 every month, or $10 per gigabyte - level with is current $30 plan.

"We think there's really great flexibility for these plans," David Christopher, AT&T's chief marketing officer for mobile told Reuters.

For example, he said a customer could use more data on their tablet one month and switch their heaviest usage to their smartphone the next month without adjusting their plan.

Or if some family members tend to use less data than others, the heavier users would be less likely to go over their limit and incur hefty overage fees under the new plan.

But if the higher price for each gigabyte of data is off-putting for some consumers, there is one key difference between AT&T and Verizon Wireless. AT&T will keep offering its existing plans whereas Verizon Wireless offers no choice to new customers and customers upgrading to a subsidized phone.

"If shared data is not for you then we'd love for you to stay on our existing plans. We know the existing plans make sense for lots of situations," Christopher told Reuters in what appeared to be a veiled dig at Verizon Wireless.

The executive declined to disclose the company's expectations for the impact on revenue and customer growth.

When Verizon Wireless announced its data share plan on June 12 some customers complained that they did not want unlimited phone calls or higher data fees.

Under the new plan, an AT&T customer with one smartphone would pay a $45 monthly fee for unlimited calling and texting and a $40 fee for one gigabyte of data. The voice and texting fee per smartphone drops to $40 for customers who pay $70 a month for 4 gigabytes of data.

An AT&T customer buying 20 gigabytes for $200 a month would pay $30 for voice and texting for each smartphone, leading to a total bill of $350 for a family of five.

In comparison, a Verizon Wireless customer would pay $150 for 20 gigabytes of data and $40 per smartphone, also leading to a total bill of $350 for a family of five.

The companies' next biggest rival, Sprint Nextel Corp, does not offer family plans for data, but instead offers unlimited data usage for a flat monthly fee.

Verizon Wireless is a venture of Verizon Communications and Vodafone Group.

AT&T shares closed at $35.82 on New York Stock Exchange Tuesday while Verizon shares closed at $45.66.

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106 Comments

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joethightwad

One land line and DSL (unlimited) keeps me in touch with everyone of importance to me for about $65 a month. When traveling, I take a pre-paid cell along for emergencies. Technology is running amuck and soon will reach its saturation point. The next time earth takes a direct hit from a solar flare, many will regret how dependant they have allowed themselves to become on it.

July 23 2012 at 2:06 PM Report abuse rate up rate down Reply
nklswrth

These phone companies are getting downright full of themselves! Thier products are not worth what they think they are, thier phones-generally-will not last through the length of the service contract, so you have to pay extra for insurance to replace thier defective phones when you buy them, they don't service thier phones at the place you bought them....compelleing you'll buy a new upgraded, replacement phone to avoid the inconvenience of sending your broken phone off for service...and on and on. The phone companies are beginning to look a lot like US airlines - overpriced, hidden fees, uncomfortable and poor service. To heck with it, they can have our phones back, unless they can come up with a family plan with unlimited calling, texting and internet for $100 per month. Otherwise y'all can reach us on the internet at FB and on our I-pods.

July 19 2012 at 10:32 AM Report abuse rate up rate down Reply
Mystery

I have proof and can cite many examples of ATT not being reputable. Thier billing is absurd, they tell you one thing and then do another, the right hand does not know what the left hand is doing. These "contracts" you have to agree to are solely for greed. I am sure they are slowly sinking and will not be in existence in then years or so. It is best they just fizzle up and go. All we need is one reputable company that is fair to itself and the consumer, not greed oriented and they would be so successful. Just my opinion but I can qualify my remarks.

July 19 2012 at 4:04 AM Report abuse +1 rate up rate down Reply
Evers

Sprint DOES offfer Unlimited data on Family Plans; it is called Everything Data Share. 2 lines for only $129.99 and up to 3 more additional lines at $19.99 each and that includes unlimited mobilie-to-mobile minutes and unlimited text aswell.

July 19 2012 at 3:51 AM Report abuse rate up rate down Reply
Jill

I think all Verizon and At&t customers should pick 1 day a week to not use their phones or any devices and make them keep losing money until they quit being so greedy. As soon as my contract is up with Verizon,I am gone...was going to try AT&T ..but not any more.

July 19 2012 at 3:48 AM Report abuse +1 rate up rate down Reply
1 reply to Jill's comment
lifehub

Agree. Soon as my contract is up I'm going with throw-aways and pre-paid plans.

July 19 2012 at 4:10 AM Report abuse +1 rate up rate down Reply
Bret

AT&T and Verizon can rot in hell.

July 19 2012 at 2:27 AM Report abuse +1 rate up rate down Reply
Shut The Hell Up

I hope AT&T And VERIOZON GET BITE IN THE ASS SO HARD

July 19 2012 at 1:31 AM Report abuse +1 rate up rate down Reply
mt1975

It sure would be nice that when someone calls my AT&T cell phone, that it actually rings and actually records the number in the caller id. How do you sit your phone on the desk, then you get a message, without any sign of when the person called or even called at all, and this has hapepned several times, with different people on different phones, but all with the no ring were AT&T. Somtimes texts or messages appear 3 days after they sent. My neighbor texted me from home, while I was home and the text took 24 hours to arrive. I then made plans for the event they were having, but little did I know the event was the day before, a full day before I even received the text.

July 19 2012 at 1:28 AM Report abuse +1 rate up rate down Reply
1 reply to mt1975's comment
footearowl

This same sh&t has happened to me plenty of times!! My g/f used to get after me and vice versa each of us thinking the other had not left a message after a fone call or sent a text in response to something. Often they "might" show up late and other times they wouldn;t show up at all!! All of these mangy, lowlife outfits ARE 100% FOR F'N GREED & THE VERY LAST THING THEY CARE ABOUT OR WANT TO HAVING ANYTHING TO DO WITH "IS ACTUAL CUSTOMER SERVICE!!!!" i'D LOVE TO SEE THE WHOLE STINKING BUNCH LOSE THEIR ASS&S AND GO DOWN THE DRINK AND WATCH A NEW AND "FAIR BUSINESS OUTFIT MOVE RIGHT IN AND SHOW THEM ALL HOW TO MAKE A BILLION FRICKIN DOLLARS AND STILL GIVE EVERYONE THE BEST POSSIBLE DEAL IN TOWN, WHILE THE OTHERS SCRATCH FOR CRUMBS JUST TO MAKE ENDS MEET FOR A CHANGE!!!!"

July 19 2012 at 4:59 AM Report abuse +1 rate up rate down Reply
frank1946

Kid just graduated, time for him to pay the Tab.

July 19 2012 at 1:21 AM Report abuse rate up rate down Reply
Ron

My Boost Mobile is looking better by the day! Decent signal, $55.00 a month with unlimited everything except foreign calls and the Shrinkage plan. Help to someone who speaks English in the US, the best rated service of any cell phone provider. I recently upgraded to an Android phone but plenty of features for the extra $5.00 a month that I pay. Just waiting for 4G to get here.
My wife had AT&T but recently dropped it. Most of her use was for the "Chirp" feature.

July 19 2012 at 12:59 AM Report abuse +1 rate up rate down Reply