Friday, January 20, 2012

AT&T data plan price hike is yet another sign of lack of competition

AT&T Wireless recently announced a price increase on their add-on data plans for wireless devices. While the increased prices were accompanied by an expansion of the data allowance, this appear to be mere window dressing. According to reports from 2010 the vast majority of the users are not using their data allowance even under the previous, lower, allowances. This means that AT&T is charging for something that is technically free to them since the increased data allowance in most cases will go unused, while still increasing the prices on both the entry level plan (300Mb) and normal usage plan (3Gb).

I guess this is somewhat more finessed than Verizon's recent debacle when they tried to charge their customers a fee for paying their bills online or over the phone.

The AT&T price hike is another sign that there is a lack of competition among the carriers in the US market and that we should all be very thankful for that the AT&T and T-Mobile deal fell through. This deal would have created an oligopoly situation with Verizon and AT&T controlling the vast majority of the market.

I also think this is another sign that the iPhone really needs to come to T-Mobile. Today, AT&T is really the only choice when it comes to the iPhone because of the slow data speed of the Verizon and Sprint 3G networks. In most developed nations outside the US these networks would be called 2G (or 2,5G). If iPhone5 comes with LTE this would also bring in a much more competitive situation for AT&T since it will make Verizon's LTE network a prime contender for potential AT&T customers.


  1. Agreed completely. How many AT&T subscribers would move to T-Mobile or move back for the iPhone?

    1. If T-Mobile offered the iPhone and competitive pricing, I think quite a few would. T-Mobile has a very loyal customer base and fast network. They could do well.