& cplSiteName &

Wi-Fi Usage Drives AT&T to Raise Prices

Sarah Thomas

AT&T Inc. (NYSE: T) has been one of the most aggressive wireless operators when it comes to Wi-Fi offload, helping customers stay under their monthly consumption caps via the company's 30,000-hot-spot-wide network. But that strategy is now being viewed as a reason why AT&T decided to raise its mobile data prices. (See New Twists in Mobile Data Pricing .)

"AT&T said at a recent conference that they are seeing customers walk up to the edge of their tier and then use a lot of Wi-Fi to stay below the tier," Jefferies & Company Inc. equity analyst Thomas Seitz said Wednesday. "We think AT&T's new pricing plan is devised in part to monetize the traffic they've previously lost to Wi-Fi."

The new plans introduced last week range from $20 for 300MB to $50 for 5GB with a hot-spot feature, and they are all saddled with a policy that charges customers who go above those thresholds. Yet, even as AT&T encourages its customers to continue to use Wi-Fi, CFO John Stephens has admitted it's a reason consumers don't move to higher tiers, and Jefferies' Seitz believes the carrier is now making up for that lost ARPU.

AT&T became the most advanced wireless operator for Wi-Fi out of necessity to relieve network congestion. The carrier has the largest and most integrated network in the U.S. and much of the world. Jefferies point out that this architecture also gives it more flexibility than most carriers, too.

Rather than charge for Wi-Fi use directly, AT&T has the opportunity to add value in the form of security, proprietary services, parental controls and just garnering subscriber information -- all scenarios that Wi-Fi vendors are encouraging operators to pursue. (See Wave Goodbye to Free Wi-Fi and Wireless Operators Embrace Wi-Fi as Their Own.)

In a report Jefferies published Wednesday, the analysts concluded that how the Wi-Fi ecosystem develops could materially influence the pricing power of mobile operators. Either they'll raise prices and risk customers substituting wireless for Wi-Fi or they'll find a way for Wi-Fi to work for them.

"If more consumers begin using Wi-Fi as a wireless alternative, we see the potential for AT&T to monetize its Wi-Fi network in creative ways," the report finds.

AT&T announces its fourth-quarter earnings Thursday, at which time the carrier will release its latest Wi-Fi statistics.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

(10)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
<<   <   Page 2 / 2
User Rank: Light Sabre
12/5/2012 | 5:44:22 PM
re: Wi-Fi Usage Drives AT&T to Raise Prices

Wi-Fi is a Band-Aid that's already coming loose. Performance is only going to deteriorate, and fairly quickly given the popularity of bandwidth guzzlers (both apps and devices). Mobile bandwidth is becoming a precious (read costly) commodity. Once operators sort out the details, they should do well. "Should" is the operative word here, though.

<<   <   Page 2 / 2
Featured Video
From The Founder
John Chambers is still as passionate about business and innovation as he ever was at Cisco, finds Steve Saunders.
Flash Poll
Upcoming Live Events
September 12, 2018, Los Angeles, CA
September 24-26, 2018, Westin Westminster, Denver
October 9, 2018, The Westin Times Square, New York
October 23, 2018, Georgia World Congress Centre, Atlanta, GA
November 6, 2018, London, United Kingdom
November 7-8, 2018, London, United Kingdom
November 8, 2018, The Montcalm by Marble Arch, London
November 15, 2018, The Westin Times Square, New York
December 4-6, 2018, Lisbon, Portugal
All Upcoming Live Events
Hot Topics
Casa Systems Shares Slide on Slashed Guidance
Jeff Baumgartner, Senior Editor, Light Reading, 8/14/2018
T-Mobile to Play the Customer Care Card With Layer3 TV
Jeff Baumgartner, Senior Editor, Light Reading, 8/15/2018
Cogent CEO Dave Schaeffer: The World on a Fiber
Phil Harvey, US News Editor, 8/16/2018
DT Seeks Fiber Allies to Tackle Germany's Gigabit Lag
Iain Morris, News Editor, 8/15/2018
Animals with Phones
When Your Cat Hijacks Your Tech Click Here
Live Digital Audio

A CSP's digital transformation involves so much more than technology. Crucial – and often most challenging – is the cultural transformation that goes along with it. As Sigma's Chief Technology Officer, Catherine Michel has extensive experience with technology as she leads the company's entire product portfolio and strategy. But she's also no stranger to merging technology and culture, having taken a company — Tribold — from inception to acquisition (by Sigma in 2013), and she continues to advise service providers on how to drive their own transformations. This impressive female leader and vocal advocate for other women in the industry will join Women in Comms for a live radio show to discuss all things digital transformation, including the cultural transformation that goes along with it.

Like Us on Facebook
Twitter Feed