AT&T is responding to aggressive competition by slashing prices of its family wireless data plans in an attempt to lure customers away from their rivals T-Mobile, Verizon and Sprint.
A family of four can now subscribe for unlimited text, talk and to 10 GB of data for $160 a month and an additional line for only $15. The new set of prices is 20 percent less than what AT&T initially charged. The same set can be purchased at Verizon Wireless but costs $100 more. Sprint Corp. charges the same $160 but only with 1 GB of data per line. T-Mobile US Inc. offers 2 GB of data for four smartphones at $140 a month.
The only downside is that an AT&T subscriber won't be able to avail phones with their new phones. They will pay for the full price of available devices that can cost $650 or more. However, they can subscribe to their installment plans. The present customers of AT&T with 10 GB of data on a family plan will be switched to the new plan by default, thereby cancelling their ability to purchase subsidized phones, Wall Street Journal reports.
The rule of thumb that emerged for wireless carriers had been to subsidize the cost of new smartphones and in turn locking their subscribers to two-year periods that would make up for the upfront expenses that they shelled out.
The shift towards a new model could be good news for carriers which take the initial impact when their customers upgrade their phones. However, it might mean the opposite for manufacturers of expensive phones. Last week, GigaOM reported that Apple CEO Tim Cook mentioned in his Q1 earning report that North American iPhone demand experienced a plummet because of the modifications in the charges of wireless carriers that made it difficult for subscribers to get discounted iPhones prior to the end of their contracts.
AT&T added 566,000 to their list of postpaid wireless users but 440,000 of those were signing up tablets by the fourth quarter of 2013. They actually lost phone subscribers in the previous quarter. Meanwhile, Verizon Wireless gained 1.6 million postpaid subscribers including 824,000 phone customers. T-Mobile had 896,000, and only the 96,000 weren't phone subscribers.
