As Predicted, AT&T Moves Beyond Unlimited Data Plans

June 4, 2010

AT&T has announced that beginning Monday, June 7, unlimited data plans will no longer be available for its new customers.

The current $30 “all you can eat” data plan for smartphones will be replaced with two different plans that provide up to 200MB for $15 per month or up to 2GB for $25 per month, with an additional tethering option for $20 per month. New iPad customers will have the choice of the existing $14.99 250MB option or the $25 2GB option. For now, existing AT&T customers will be able to keep their unlimited data plans if they wish.

AT&T’s decision confirms Pyramid Research’s assessment that operators will move away from the unlimited pricing model because it is not sustainable in the long term.

As explained in the Pyramid Research insider Mobile Data Pricing Plans: How Operators Can Escape the "All You Can Eat" Trap, there are several tools operators can use to cap data usage and monetize increasing traffic growth:

• Limit the volume of data included in data plans
• Limit the time of network access
• Move traffic from peak hours to off-peak nights and weekends

With the new data plans, AT&T aims to appeal to customers who believe that unlimited data plans are too costly and exceed their needs. Our research confirms that pricing models adapted to changing clients’ data usage patterns attract new customers and retain the old ones. In addition, a good pricing strategy may help operators ensure predictability of network use and capitalize on the exponential increase in traffic generated from the use of data intensive applications. A good pricing strategy is therefore the key to success in the mobile market.

— Ewa Romaniuk-Calkowska, Analyst

Related resources:

Mobile Data Pricing Plans: How Operators Can Escape the “All You Can Eat” Trap
This Global Telecom Insider analyzes the evolution of pricing for mobile data plans and the impact on subscriber adoption and usage levels. It begins by reviewing the evolution of data plans to date and highlighting the limitations of existing plans, particularly the “all you can eat” model. We then provide examples of how data plans must evolve in order to address two key objectives of operators: increasing spending from existing users and attracting new users. The report includes case studies of three operators: Orange France, NetCom Norway and Oi Brazil.

Mobile Operator KPI Forecasts
Our Mobile Operator Key Performance Indicators Forecast products provide a complete picture of wireline voice and data communications around the world. The Excel output includes five years of historical data and five years of market projections for metrics such as subscription totals, market shares, net and gross additions, prepaid and postpaid subscriptions, business subscriptions, data ARPS, aggregate ARPS, prepaid and postpaid MOU, churn and total service revenue - all broken down for the mobile operators in the respective markets. We believe our Mobile Operator KPI Forecasts are superior because they capture granular data gathered through extensive field research and use a thorough methodology consistently applied to all markets.