ATandT Confirms iPhone Service Plan Reduction

Apple iPhone plans on the AT&T network may soon run a little cheaper, an AT&T executive tells Reuters. The option of a cheaper iPhone data plan could potentially benefit both customers and AT&T.

More flexible pricing may soon be coming to an Apple iPhone near you.
Ralph de la Vega, president and CEO of AT&T Mobility and Consumer Markets, spoke at the Reuters Global Technology Summit in New York on May 19 and confirmed reports that AT&T may offer lower rates for data plans, according to Reuters.

Instead of lowering its current $70 fee for its all-you-can-eat service, Reuters reported that AT&T may offer an additional plan, offering limited data downloads for a more palatable $40.
"Right now we continue to study what is the best thing that is available, not just from the iPhone point of view, but what you can do to stimulate additional demand," Reuters quoted de la Vega as saying.
Roger Kay, president of research company Endpoint Technologies, told eWEEK that a second pricing plan would also offer AT&T another way to manage traffic.
"All this new visually oriented data traffic is being generated by these small devices with buffet plans, which encourage gorging," Kay said. "Pricing lower and restricting usage at the same time drives subscribership in down times, and tries to maintain service levels as traffic rises in advance of any build-out of next-generation data communications infrastructure."
Additionally, as consumer wallets grow thin in a struggling economy, AT&T is facing the reality that it will likely soon no longer have an exclusive relationship with its major breadwinner, Apple.
A May 5 report from Citi Group offered reasons for believing that once Apple's exclusivity contract with AT&T runs out at the end of 2010, Apple will likely offer a CDMA (Code Division Multiple Access) version to Verizon.
In regard to the effects of this decision on AT&T, the Citi analysts wrote, "We believe the looming expiration of the exclusivity raises the urgency for AT&T to market successful smartphone alternatives to the iPhone."
New pricing options would be one more way for AT&T to diversify its offerings.