AT&T Dials Down Pricing on No-Contract Plans
Given that both Sprint and T-Mobile have recently taken similar steps, there's little doubt AT&T's move is competitively motivated. "The new AT&T plan is both a response to T-Mobile and an attack on Verizon by lowering prices for people who do not have a subsidy," asserted Roger Entner of Recon Analytics. "It also counters the criticism of some consumer groups that AT&T makes people pay twice for their device."
Dec 5, 2013 12:19 PM PT
AT&T on Thursday announced new, lower-cost no-contract plans for customers who pay for their own devices.
The new Mobile Share Value plans, which will be available beginning Dec. 8, will be open to new and existing wireless customers and will include a no-contract option that allows smartphone customers to save $15 per month by supplying their own device, AT&T said. To be eligible for those savings, consumers can get a new smartphone with no down payment via AT&T Next, purchase a handset at full retail price or use a device of their own.
Through the Mobile Share Value plans AT&T customers will also be able to take advantage of shared data and connect up to 10 devices, including tablets and other wireless devices. Business customers, meanwhile, will have the option of connecting up to 10, 15, 20 or 25 devices, depending on the plan they choose.
Consumers will pay a set fee per device, while data is shared among all the devices on the plan. Costs for data range from US$20 for 300MB of data per month to $375 for 50GB of data. All the plans include unlimited talk and text.
A Competitive Maneuver
Both Sprint and T-Mobile have also launched no-contract plans.
"The new AT&T plan is both a response to T-Mobile and an attack on Verizon by lowering prices for people who do not have a subsidy," asserted Roger Entner, principal analyst at Recon Analytics. "It also counters the criticism of some consumer groups that AT&T makes people pay twice for their device."
A lower price "certainly makes AT&T more attractive in the eyes of the consumer, and will probably stem the subscriber losses to T-Mobile," Entner told the E-Commerce Times. "We'll see if the price reduction in conjunction with AT&T's claim of having the better network is enough to get people from Verizon to switch to AT&T."
Of course, "I think you would be hard-pressed to find anyone at AT&T who would suggest that the company is following T-Mobile's lead," Chris Silva, research direct for mobile and client computing at Gartner, told the E-Commerce Times.
Hedging Against BYOD
"More than anything, this move is hedging against BYOD," Silva suggested. "More and more, consumers are bringing their device to a new carrier -- AT&T is positioning itself to be ready for the changing market demographic."
The key factor driving that trend "is the 12- to 15-month cycle of new devices," he added. "This is creating a pent-up demand to move to the next device sooner. This provides a way to be outside the subsidy group."
Some consumers may face some sticker shock, however, as "here in the United States consumers are often looking at the subsidized price for the device, and not the actual $600 to $700 price," Silva concluded. Then again, "many consumers are already paying that $15 surcharge, which adds up to $360 in two years anyway."