10 Problems with ATandT's Revised Data Plans

By Don Reisinger  |  Posted 2010-06-03

10 Problems with ATandT's Revised Data Plans

AT&T made waves earlier this week when it announced that it had changed how iPhone owners would be paying for its data plans. Rather than pay $30 per month for unlimited data, iPhone owners can now opt to pay $15 per month for 200MB of data or $25 per month for 2GB.

At first glance, most users would say that it's nice that AT&T is helping them save money. After all, they stand to gain anywhere between $5 and $15, depending on how much data they use in a single month. 

But a deeper inspection of AT&T's changes reveals several issues. For one, the company doesn't seem to realize that unlimited data was a key selling point for iPad customers. It also doesn't understand that capping data isn't always the best option.

Regardless, these are the new plans in place, and whether or not iPhone and iPad customers like them, starting next week, they will need to live with them. For its part, AT&T believes it's doing the right thing and actually helping customers. But some that have evaluated the changes have a much different opinion. Let's take a look at the issues with AT&T's data plan changes.

1. Consumers save a little

By switching to one of AT&T's new plans, current iPhone owners will undoubtedly save some cash each month. But for many, they might only stand to gain about $5 per month by switching from their old plan to a new one. That's certainly better than nothing, but it's not enough to make it as big of a deal as AT&T would like to make it. Plus, AT&T's cheaper plan caps data at 200MB. If folks use anything more than that in an average month, the smarter option is to switch to 2GB, saving them just $5 per month.

2. Overage charges are high

The overage charge on AT&T's 200MB plan is outrageous. According to AT&T, it will charge $15 extra for those folks on the 200MB plan who require another 200MB. In other words, the person will pay $30 for 400MB of data, which is the same price they currently pay for unlimited data. That said, if folks opt for the 2GB plan, they will only need to pay $25. AT&T's pricing scheme makes little sense. And eventually, consumers will complain about it.

3. Tethering is expensive

Tethering, which was originally announced as an option by Apple a year ago, will finally make its way to the iPhone when iPhone OS 4.0 is released. Unfortunately, customers will be forced to pay $20 per month to do it on top of the data fees they're already paying. Worst of all, AT&T doesn't offer any more data with tethering, so consumers will be forced to manage their usage on both the iPhone and on a laptop that's using the iPhone as a tethered modem. That's ridiculous. If AT&T wants to allow tethering and charge that much, it should offer more data with it.

4. It's capped

Although AT&T claims that the vast majority of customers never come close to 2GB of data per month, that could change. After all, tethering is coming and enterprise customers alone could be using much more than 2GB of data each month because of it. Although it's understandable why AT&T wanted to cap traffic, it should offer an unlimited plan for, say, double the price of the 2GB version. Such a price would keep most folks out, and would also drive added revenue to the company from those who need the extra data. Unlimited data is a necessity for some customers.

ATandT Data Plans Wont Help iPhone, iPad Sales


5. The timing is bad

AT&T's changes to its data plans couldn't have come at a worse time. Just over a month after the iPad 3G hit store shelves with the promise of unlimited data, AT&T has changed it. Now, those consumers who were hoping to be able to stream as much content over the Web as they'd like are going to be subject to the same 2GB limit iPhone owners have. Why AT&T would decide to change iPad data plans so soon after the iPad 3G launched is anyone's guess. It could be a big mistake.

6. iPads aren't unlimited

Speaking of the iPad plans, it's also important to note that AT&T will not be offering an unlimited plan to iPad owners. Aside from the timing issue, it could be extremely troublesome for Apple. After all, the hardware company is calling the iPad the computer that folks will want to use in the living room. They will want to watch television shows on ABC's video player, stream movies over Netflix and much more. Now they need to worry about how much data they're transferring. That might turn some customers away.

7. The Apple issue

Apple should be extremely displeased by AT&T's new data plans. Not only does it make the company look bad, but it could drastically affect sales. After all, if consumers require tethering and don't want to pay $20 just to have that option on an iPhone, they will go elsewhere. And if they realize that they might not be able to do everything they want with the iPad when they're away from home because of arbitrary data restrictions, they might choose to look elsewhere. Apple's products just lost some market appeal because of AT&T.

8. It's a long-term plan for AT&T

AT&T is saying all the right things so far. The company has said since it first announced the new plans that it's trying to help consumers. AT&T's decision to change data plans, aside from potentially protecting itself against the competition, is more likely rooted in its desire to get more users to smartphones. By dropping the price, AT&T undoubtedly believes that it can coax customers to pick up a smartphone. That, in turn, helps it generate revenue from their voice plans, as well as get them into a data plan. It's a win-win. Make no mistake, AT&T's decision had everything to do with business.

9. Consumers might not understand it

The main issue for any company that's attempting to change a service is educating customers. Currently, iPhone and iPad owners know what they're paying and understand that plan. But by creating a tiered service, AT&T will now need to go out and re-educate those folks on what they need to know about the data plans. Although those who follow the industry can pick up on those changes quite quickly, novices or those who only use technology and don't follow the industry won't be so quick to jump on the AT&T bandwagon. These plans can be confusing to novices. And it's important to remember that.

10. Apple hasn't stepped in

A major issue some are having with AT&T's plans is Apple's decision to keep relatively quiet about them. Granted, Apple can't decide what AT&T does with its plans, so the company can't stop it. But it can apply pressure to make the plans better. After all, AT&T's new data plans play a role in the sales of the iPhone and iPad. If consumers like what they see, they will be more likely to buy Apple's products. If they don't, they won't pick them up. Apple should be applying some pressure on AT&T to get the plans that it believes are best for all parties involved. Then again, maybe it already sanctioned the changes. If so, consumers can take issue with both AT&T and Apple, since these plans are rife with issues.

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