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AT&T alters data plans

By Peter Svensson
Associated Press / June 3, 2010

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NEW YORK — Just in time for the release of a new iPhone, AT&T will stop letting new customers sign up for its unlimited Internet data plan for smartphones and iPads and charge more for users who hog the most bandwidth.

AT&T hopes to ease congestion on its network, which has drawn complaints, particularly in big cities. But the approach could confuse customers unfamiliar with how much data it takes to watch a video or fire up a favorite app.

Current subscribers will be able to keep their $30-per-month unlimited plans, even if they renew their contracts. But starting on Monday, new customers will have to choose one of two new data plans for all smartphones, including iPhones and BlackBerrys.

Subscribers who use little data — like those who may get dozens of e-mails a day but don’t watch much video — will pay slightly less every month, while heavy users will face higher bills.

The move takes effect in time for the expected unveiling of Apple’s new iPhone next week.

Analysts said they expect other phone companies to follow. With no caps on consumption, data use could swamp wireless networks while revenue remains flat.

Verizon Wireless, the largest wireless carrier and AT&T’s chief rival, had no immediate comment on AT&T’s move.

One of the new AT&T plans will cost $25 per month and offer two gigabytes of data per month, which AT&T says will be enough for 98 percent of its smartphone customers. Additional gigabytes will cost $10 each.

A second plan will cost $15 per month for 200 megabytes of data, which AT&T says is enough for 65 percent of its smartphone customers. If they go over, they’ll pay another $15 for 200 more megabytes.

A gigabyte is enough for hundreds of e-mails and Web pages, but it is quickly eaten up by Internet video and videoconferencing. The 200 megabytes offered under the $15 plan is enough for more than 1,000 e-mails, hundreds of Web pages, and about 20 minutes of streaming video, AT&T says.

With the smaller plan and voice service, a smartphone could cost as little as $55 per month before taxes and add-on fees, down from $70 now. Ralph de la Vega, head of AT&T’s consumer business, said smartphones would become accessible to more people.

The limits will apply only on AT&T’s cellular networks. Data usage over Wi-Fi networks, including AT&T’s public Wi-Fi hot spots, will not count toward the limits.

De la Vega noted that AT&T lets customers track their usage online. The iPhone also has a built-in usage tracking tool.

The carrier will also text subscribers to let them know they’re nearing their limits.

Jason Prance, an iPhone 3G user in Atlanta, said his first reaction to the end of unlimited usage was to be “ticked off.’’

But then he checked his data consumption on his iPhone for the first time and found he had never used more than 200 megabytes in a month.