I think AT&T (NYSE: T) is getting a bad rap over its new mobile data plans; even if your Apple (Nasdaq: AAPL) iPhone gets regular workouts on the 3G network, most people seem able to save some money under the new plans. But what really bothers me about the change is the way AT&T blows hot and cold with the same mouth.
Talking to GigaOM last week, Mark Collins of AT&T's voice and data division explained that the tiered pricing plan is necessary because different users have different needs. "Now you need to price it according to the value equation so the market can allocate the resources accordingly," he said. All right, fine; after all, most users will actually save money with the new plans if you assume that they don't change the way they use wireless data services.
But that does not make AT&T a hero. A tethering add-on to the plan lets you share the data with devices other than your phone for $20 a month -- which is somewhere between stupid and just plain evil when you have a limited data plan. Two gigabytes may be fine for today's smartphones and the ways we use them, but it's a different story when you switch to a laptop and all the bandwidth-draining things we do there. And Collins explains that "you're going to use more data, so the price is based on the value that will be delivered."
Hello? We'll use more data, so let's put a cap on how much we can use? If that makes sense to you, I want some of what you're smoking.
And in the long run, these caps will be untenable. One of the most popular iPad applications is the Netflix (Nasdaq: NFLX) video-streaming service. It doesn't take too many high-resolution movies to bump into that 2-gig ceiling. Never mind the new Apple iPhone 4, which comes with high-definition cameras and a highly touted video conferencing tool. If AT&T didn't know about this when they implemented the limited data plans, I'll be a monkey's second cousin.
The timing of these new plans is even more curious because there's a faster 4G network around the corner. Sprint Nextel (NYSE: S) already has its up and running in selected spots; Verizon (NYSE: VZ) follows next; and AT&T will join the party in 2011. But why bother raising the speed limit when you're also cutting the road short? Cisco Systems (Nasdaq: CSCO) is betting its future on the popularity of online video streams -- AT&T wants us to stop it.
Summa summarum, many consumers will actually love AT&T's cheaper data plans today but will feel stymied by them in the not-too-distant future. Will AT&T decide how we use our gadgets, or will the demand for at least an unlimited option be too great in the end? Discuss in the comments box below.
