AT&T Shared Data Plans Draw Public Interest Groups’ Ire

Verizon Wireless unveiled its similar “Share Everything” plans last month, which became available June 28 (WID June 13 p4). Both companies’ plans give subscribers unlimited voice minutes and text, charge a graduated fee depending on the amount of purchased data and an additional fee for each device that will use the plan’s data pool. Unlike Verizon, AT&T will still offer subscribers traditional individual and family plans as well.

Public interest groups railed against the AT&T move, as they did for Verizon Wireless’s change. “Unfortunately, new pricing plans like these lead to more expensive wireless bills for most consumers,” said Free Press Policy Director Matt Wood. “These frequent price hikes, with the two largest carriers mirroring each other’s every increase, underscore the need for real competition and choice in the wireless market.” Wood tied the data plan news to concerns that AT&T may start charging for FaceTime when the currently Wi-Fi-only app becomes cellular-compatible in the upcoming iOS 6. The blog 9toMac first posted about that possibility Monday (http://xrl.us/bnhcaz). AT&T CEO Randall Stephenson reportedly told a conference Tuesday that it was “too early to talk about pricing” (http://xrl.us/bnhca5).

"It’s worrisome to see how far these companies will go to pad their profits on the backs of consumers,” Wood said. “AT&T’s announcement ... followed on the heels of its CEO’s acknowledgment that the company may consider an additional charge to use FaceTime. That type of application-specific charge would violate the FCC’s Open Internet rules and make consumers pay twice for the same data.” The carrier is “working closely with Apple on the new developer build of iOS6 and we'll share more information with our customers as it becomes available,” an AT&T spokesman said.

Public Knowledge also criticized AT&T over the FaceTime controversy. Harold Feld, the group’s senior vice president, said “AT&T should take note of the widespread outrage to these rumors and walk back any plans it may have to double charge users for using their iPhones.” John Bergmeyer, the group’s senior staff attorney, said he thought AT&T’s new data plans were another example of a “double charge."

The companies’ plans have different pricing scales that make AT&T the cheaper option at some levels, while Verizon Wireless might be preferable at others, analysts said. Credit Suisse analyst Jonathan Chaplin wrote in a research report Wednesday that “AT&T’s 1GB data plan is priced at a discount to Verizon while higher plans are all priced at a premium.” If a subscriber purchases AT&T’s 1 GB shared data plan for use on one smartphone, it would cost $85. The same plan would cost $90 with Verizon Wireless. AT&T’s current cheapest smartphone plan, which costs $60 per month, gives the subscriber 300 MB in data and 450 voice minutes. Both companies charge the same amounts for non-smartphone devices, but use different pricing structures for smartphone fees: Verizon charges a flat $40 fee for each smartphone, while AT&T charges on a downward scale from $45 to $30 per smartphone, depending on the amount of purchased data.

Analysts noted that the new plans should help boost AT&T’s revenue. “AT&T follows Verizon’s step in moving away from pricing voice, text and data separately -- this eliminates investor concern that voice and text revenues could come under pressure as consumers move to over-the-top solutions like VoIP,” Chaplin said. “The simplified pricing model should encourage device adoption, which should in turn drive up aggregate usage and revenue growth over time.” Wells Fargo’s Jennifer Fritzsche said the plans would “help drive additional data usage and device adoption.”