Optical/IP Networks

AT&T Axes Lower-Cost SMS Plan

AT&T Inc. (NYSE: T) is sticking with unlimited in at least one area -- SMS. The carrier confirmed Thursday it is doing away with its $10 plan for 1,000 text messages per month, giving new customers an option of unlimited texts or pay-per-text plans.

AT&T said in an email to LR Mobile that its unlimited-only options have proved to be the most popular, prompting it to ditch the lower-cost plan, a move that Engadget first leaked on Wednesday. Existing customers are grandfathered in, but starting Aug. 21 new customers will choose from $20 per month for unlimited texts, $30 per month for a family messaging plan or pay per text at $0.20 for each SMS and $0.30 per MMS.

On the pay-as-you-text plan, users will reach $20 after only 100 messages, making unlimited the most economical for even moderate texters.

Why this matters
SMS has exploded in the past, overtaking voice calls as the preferred mode of communication for many. But, consumers aren't as dependent on the carriers for SMS as they once were. There are a number of third-party chat apps that circumvent the network, and free services like BlackBerry Messenger and the soon-to-be-launched Apple Inc. (Nasdaq: AAPL) iMessage make the channel less important. (See Apple Borrows From Competitors for iOS 5.)

AT&T is also likely hoping to drive more revenue from SMS, which has been on the decline as IM services gain share. On average, each U.S. subscriber sent about 664 messages per month in the second quarter, but the percentage share of data revenues continues to decline for messaging, according to industry analyst Chetan Sharma. For more
Read more on SMS, including its security risks, costs and social-networking uses.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

sarahthomas1011 12/5/2012 | 4:55:54 PM
re: AT&T Axes Lower-Cost SMS Plan

So, you can have AT&T turn off texting entirely, but if you want to block or ignore certain texts, you have to pay $5 per month for its Smart Limits program. Given that, I can't see anyone choosing this route unless they don't text at all.

sam masud 12/5/2012 | 4:55:54 PM
re: AT&T Axes Lower-Cost SMS Plan

In other words, ATT would like everyone to move to the pricer plan just because most people seem to prefer it. And the only alternative they have is to choose pay per text. Hmmmm....I'd want to shop around.

sarahthomas1011 12/5/2012 | 4:55:54 PM
re: AT&T Axes Lower-Cost SMS Plan

I can't imagine that many people would pay per text. That'd get real pricey, fast. I have asked AT&T if you can block texts coming in to not pay for them, and a spokesman is following up with me. I'd hope there's a way to do that...

mgardner750 12/5/2012 | 4:55:54 PM
re: AT&T Axes Lower-Cost SMS Plan

I had AT&T block text messing from my phone. It only took a phone call.

Tobarja 12/5/2012 | 4:55:52 PM
re: AT&T Axes Lower-Cost SMS Plan

It's really quite simple. For AT&T to make more money, you must spend more.

To encourage this, we (AT&T) have now made it easier for you to do so. Either pay for this nice healthily inflated messaging plan, or pay per text.

Tom Merrit on Tech News Today (08/18/2011) said that it was calculated that a SMS costs approximately two one hundredths of a cent to send.

If unlimited texts were not included on my plan, I would happily pay triple the cost for text messaging. My usage would come out to under two cents.

I'd also pay for my Internet bandwidth as well. "Yes, I'd like to prepay for approximately 1 year's worth of Internet. Here's a check for $25, that should cover it."

^Eagle^ 12/5/2012 | 4:55:51 PM
re: AT&T Axes Lower-Cost SMS Plan

actually, the cost to send a text is closer to 2 1/thousands of a cent.  Not 2 / 100ths.  They send the txt in the dead "space" between words.  if you analyze voice calls, a large percentage of them are quiet space between words, etc.  

note: I used to be in the mobile industry.  Ran repair for a 5 state region.


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