AT&T previously sold tablets only on a pre-paid basis, but customers will now have a choice between pre- and post-paid plans, which are tacked on to their existing monthly wireless bills. If they choose post-paid, they can choose $15 for 250MB or $25 for 2GB, plus $10 per 1 GB of overage, but the plans are still contract-free. For pre-paid, the prices and limits are the same, but those who go over on the 2GB plan may choose to purchase an additional 2GB for $25.
Verizon will soon join AT&T in tiered pricing, it confirmed just a month after it began selling the iPhone 4. Chief Financial Officer Fran Shammo, speaking at a Morgan Stanley tech conference Wednesday, said Verizon will make its long-awaited move to tiered pricing in June, around the time it plans to have many more Long Term Evolution (LTE) devices on the market.
Why this matters
The move to tiered pricing is promoted as a way to increase simplicity for consumers. While bundling it with the wireless bill certainly does that, tiered plans are also more lucrative for the carriers. AT&T Mobility CEO Ralph de la Vega told investors at the conference Wednesday that it has 10 million subscribers on its usage-based plans, up from 7 million in December, so demand is continuing to grow as well.
Verizon hasn't stated how it will cap its plans – whether based on usage or speed, but it will have to do so carefully to avoid consumer backlash. How consumers react depends largely on if they are light or heavy data users, but -- as with AT&T -- there are sure to be grumbles when Verizon first makes its move.
Either way, most see the move to tiered pricing as inevitable as wireless revenues shrink and subscribers migrate to data-driven 4G networks. (See Mobile Data's Doomsday Scenario.)
This isn't the first time the operators have changed up their pricing structures. Check out the following stories for the changes they've made recently.
- Sprint Raises 3G Prices to 4G Levels
- MetroPCS Intros $40 LTE Rate Plan
- Boom Time for Policy
- Verizon Plays It Safe With LTE
- Swedish LTE Challengers Wield Unlimited Offers
- Clearwire Pushes Pay-as-You-Go With Rover
- Sprint Sticks With Unlimited Data Plans
— Sarah Reedy, Senior Reporter, Light Reading Mobile