Telecom giant AT&T (NYSE:T) is feeling the heat these days in a significant way as competition to acquire high-margin smartphone subscribers has grown all the more fierce in the past several months.
In part, this is due to a resurgent Sprint and, especially, T-Mobile, which have both gone to considerable lengths to challenge the status quo with AT&T and Verizon Communications. Worse yet for AT&T and Verizon, T-Mobile's aggressive pricing is working beautifully. For instance, T-Mobile recently disclosed it added 800,000 customers in the fourth quarter of 2013.
Much of the distaste with the likes of AT&T centers around people's expensive bills. And in order to fix this, AT&T seems willing to experiment with some interesting ideas.
Pay to play
AT&T recently unveiled its Sponsored Data plan in hopes of addressing this issue head-on.
The service, which will act similarly to a toll-free call over a telephone, would have companies actually pay for the cost of streaming something, like, say, a new Netflix show as a promotion, over AT&T's network at no cost to the consumer. The idea here is that in doing so, AT&T would be able to help reduce data usage costs for its subscribers.
In the video below, tech and telecom analyst Andrew Tonner discusses this news in greater detail.