AT&T Raises Prices for Low-Data Users, Lowers Rates for High-Data Plans--Update
August 17 2016 - 4:07PM
Dow Jones News
By Drew FitzGerald
AT&T Inc. on Wednesday introduced a new slate of wireless
plans that raised prices for its most frugal customers, while
lowering costs for its biggest data users.
The company's new mobile share advantage plan also will
eliminate overage fees, opting instead to slow wireless speeds for
customers who have topped their monthly data allowances. That move
follows the model used by discounters T-Mobile US Inc. and Sprint
Corp., which have dropped overage charges. Verizon Communications
Inc. charges its subscribers a fee to avoid such charges.
"The carriers have all conceded that overage charges probably
aren't the answer," said Craig Moffett, senior analyst at research
firm MoffettNathanson. "Overage charges trigger calls into customer
service, more unhappy customers and ultimately more churn."
AT&T's price change, its first since last year, follows a
similar step by rival Verizon Communications Inc. which raised
prices in July for each of its plans while also increasing the data
allowances. And it comes amid signs that the aggressive discounting
the nation's biggest carriers have been using in recent years is
slowing down.
Under the changes, AT&T's lowest-tier data plans now will
cost $10 more a month but offer more data. For instance, its
cheapest plan will cost customers $30 a month with one gigabyte of
data, compared with $20 a month for 300 megabytes of data
previously.
That contrasts with its bigger data plans for which prices have
come down substantially. A 30-gigabyte plan now costs $135 a month,
down from $225. And its new plan prices are now more comparable to
Verizon's revised rates.
AT&T also lowered some activation fees by charging most
subscribers $20 a month for having a smartphone connected to the
system.
AT&T spokeswoman Emily Edmonds said customers of AT&T's
most popular 15-gigabyte plan now will pay less. Customers also can
keep their old plans if they wish. The new rates will be available
on Aug. 21. Its new pricing is now more comparable with Verizon's
revised rates.
Some U.S. wireless companies have hinted at possible price
increases after years of rate cuts that have eaten into profits.
But the expected release later this year of a new iPhone model from
Apple Inc. could complicate that effort if wireless companies feel
the need to offer deeper promotions to get customers to upgrade
their handsets.
Write to Drew FitzGerald at andrew.fitzgerald@wsj.com
(END) Dow Jones Newswires
August 17, 2016 15:52 ET (19:52 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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