No more unlimited data with AT&T

AT&T has moved to embrace the masses and alienate power users by ending smartphone/iPad plans that offered unlimited data use.

Instead, new customers can either pay $15/month for 200 MB of data or $25/month for 2 GB of data (the old iPad plan was $29.99/month for unlimited data. Existing customers will be grandfathered while their current plans are in effect.).

Yes, this will rein in bandwidth-hogging data users. But that cost savings will come at a price.

In its announcement, AT&T said that almost two-thirds of its customers don't use 200 MB on average each month, while 98% use less than 2 GB/month. Considering the capacity problems AT&T has suffered on its networks the past couple of years, AT&T woefully undercalculated either the number of customers it would attract, its customers' likely average usage or how much data a small slice of its heaviest users would consume.

AT&T Data Plan

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Sharon Machlis:

No more unlimited data with AT&T

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Clearly, though, it's going after that last group in capping off maximum monthly data use.

I'd also guess that AT&T has been unpleasantly surprised by network data usage from iPad owners.

Oddly, in the same announcement, AT&T unveiled tethering -- the ability to use your AT&T smartphone as a modem for your PC -- for an additional $20/month. Do people really want to be limited to 2 GB/month on their laptops, too?

I can understand why AT&T wouldn't want to make even more billions in network improvements if all that would do is service a tiny slice of highly unprofitable customers. However, what I think they're missing here is that those customers are often not only early adopters, but tech influencers among their circle of family and friends.

Maybe AT&T is betting that they don't need those influencers anymore, that iPhones and iPads have moved from the cutting edge to the mainstream.

And that's probably true, especially in the under-35 demographic -- except many of those are also customers who are likely to want to stream more than a couple of hours of video.

Saddled with a reputation for less-than-ideal service for its iPhone users, the new pricing plans may help AT&T's network offer enough capacity to better serve its customers. However, it's also going to increase the clamoring for an alternative wireless service provider for Apple mobile hardware. Maybe AT&T is making a smart financial move by targeting more profitable light data users. But in the fast-moving mobile market where cultivating an image of being near the technology cutting edge is critically important, I question the wisdom of ticking off your power users. And I suspect their ire won't be contained to AT&T for long if Apple doesn't soon end AT&T's iPhone monopoly and finally offer its fans an ISP alternative.

Sharon Machlis is online managing editor at Computerworld. As a business reporter in the '80s, she covered the court-ordered breakup of AT&T. Her e-mail address is You can follow her on Twitter @sharon000 or subscribe to her RSS feeds:
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