AT&T is giving new consumers fewer options on text messaging. The wireless carrier is revising its text-messaging pricing to push consumers toward more expensive unlimited plans.
The changes mean there is no longer a plan that gives new customers 1,000 text messages for $10 a month. Customers can choose to pay $20 a month for unlimited texting -- a family of five gets a break at $30 a month for the group --or settle for a pricing paradigm that charges 20 cents for each text message sent or received. AT&T will allow current customers to stick with the old plans.
"We regularly evaluate our offers and are making some adjustments to our messaging lineup," AT&T said. "The vast majority of our messaging customers prefer unlimited plans and with text-messaging growth stronger than ever, that number continues to climb among new customers."
Driving More Revenue
The explosive growth of text messaging is a reality. According to the International Telecommunications Union, more than 6.1 trillion text messages were sent last year. But some technology changes could eat away at carrier revenues, which may be why AT&T is making this move.
"As always, consumers will have to look around at the best value proposition," said Michael Gartenberg, an analyst at Gartner. "The good news for consumers is there are things like Facebook chat and BlackBerry Messenger and Apple's upcoming iMessage that can serve in many cases as SMS replacements. You could also use Google Voice, for example, to avoid SMS fees entirely."
Still, the bottom line is that AT&T is reducing customer choice at a time when it's trying to get the Federal Trade Commission to approve a mega-merger with T-Mobile that will, essentially, reduce customer choice. With that in mind, Gartenberg questioned the timing of AT&T's pricing revamp. Why now?
"This is another way of driving revenue. Either you are getting people to step up to an unlimited plan or 20 cents a message," Gartenberg said. "Most consumers don't necessarily keep track of their texting habits. You are talking about a younger demographic that is probably more likely to go to the unlimited plan than the pay-per-message plan."
Mobile Broadband Throttling
The move to end the $10 text-messaging plan for new customers comes on the heels of AT&T's decision to throttle mobile broadband accounts to "manage exploding demand for mobile data."
Starting Oct. 1, AT&T smartphone customers with unlimited plans may experience throttling, or reduced connection speeds. The carrier describes the customers likely to be throttled as those whose extraordinary level of data usage puts them in the top five percent of the heaviest users in a billing period.
Heavy mobile broadband users, then, can expect to see reduced speeds once usage in any given billing cycle pushes them beyond AT&T's data-comfort zone. These consumers can still use unlimited data, and the throttling is only temporary. When the next billing cycle begins, those heavy users can connect at full speed once again -- until they cross the threshold.
Posted: 2011-08-24 @ 12:25am PT
AT&T also, revealed that the same users use 12 times more than the average of all other smartphone data customers.