10 Problems with ATandT's Revised Data Plans

News Analysis: AT&T's new data plans might cause some potential customers to think twice. At first glance, they might seem like a great way to save some cash. But further inspection reveals they might not be as great as AT&T wants consumers to think.

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.

Don Reisinger

Don Reisinger

Don Reisinger is a longtime freelance contributor to several technology and business publications. Over his career, Don has written about everything from geek-friendly gadgetry to issues of privacy...