I wanted to praise AT&T for preserving its old plan offerings while adding the Mobile Share option. This presents some choice in an industry with very limited choice. Wired Opinion offers a great take on the limited choice in What’s Good for Verizon and AT&T Is Terrible for American Consumers and the level of power AT&T and Verizon Wireless have over the US cellphone industry. Unfortunately, Verizon and AT&T do present some good offerings that come with their more expensive plans. Coverage and data speed would my personal top two. However, I will ignore some of the negatives raised by Wired and many other blogs and simply compare the two new plans and this shift in business models.
I wrote before that I believed Verizon’s decision to force all new customers and existing customers who were upgrading into their new Share Everything plan presented a tremendous opportunity for AT&T. Providing options is generally always a great thing for consumers, who does not like choice? Who does not like the ability to pick exactly the plan that suits them best? Unfortunately, AT&T made the great option of choice more confusing than really necessary.
Here is the breakdown of the costs of the new Mobile Share plan:
| Monthly data tiers and cost | |||||
|---|---|---|---|---|---|
| 1 GB | 4 GB | 6 GB | 10 GB | 15 GB | 20 GB |
| $40 | $70 | $90 | $120 | $160 | $200 |
| Monthly cost per smartphone for each data tier | |
|---|---|
| $45 | 1 GB |
| $40 | 4 GB |
| $35 | 6 GB |
| $30 | 10+ GB |
| Monthly cost of the rest of the devices (same as Verizon Wireless) | |
|---|---|
| Feature Phone | $30 |
| Laptops, Netbooks and Hot Spots | $20 |
| Tablets | $10 |
AT&T’s buckets of GBs are close in cost to Verizon’s and all of their per device cost are the same, except for the sliding scale of smartphone prices. AT&T elected to charge different rates for adding smartphones based on the chosen data bucket. This strange discounting model actually makes comparison shopping even more involved. Potential and existing customers must avoid simply comparing their existing family plan and evaluating the cost of switching to the most similar package of the new plan. The cost of data increases with each tier, but because the cost per smartphone differs at the 1, 4, 6 and 10 GB tiers, the possibilty to get more data for the same or even a slightly lower price exists. A few examples:
Ars technia highlights a reader comment on the cost of 5 smartphones at 4, 6, 10 GBs. Due to the decrease in cost per smartphone at those tiers, 5 smartphones at 4 GBs costs $270, 6 GBs costs $265 and 10 GBs costs $270. This basically makes the 10 GB package the most economical. Even if the family somehow never exceeds 4 GBs with 5 smartphone lines, it is actually cheaper to get the 6 GB package.
My own family’s share plan breakdown:
3 feature phones and 2 smartphones. 4 GBs would cost us $240, 6GBs – $250, 10 GBs – $270. In the end, due to the different cost of the data tiers and the reduction of smartphone access costs at the higher tiers, Verizon Wireless’s prices come out the same at each tier.
Thus, if consumers are price shopping, AT&T successfully added another complication to their search. This kind of choice is silly. The one thing I did highlight in my One Size Fits all entry was I thought it was ridiculous to charge per GB and then differentiate feature phones from smartphones, you cannot make any more calls or send any more texts on the smartphone than the feature phone. If the smartphone eats up more data, the consumer has to pay for it through overages or moving to a more expensive data tier with more GBs. Thus, the one thing I like about the sliding scale of smartphone access charges is at the 10 GB tier, smartphones cost the same as feature phones. Smartphone access charges changing at the different tiers makes things more confusing, but it is nice to see at one level smartphones are charged the same as feature phones.
One thing I neglected to mention yet, even with AT&T and Verizon’s offerings for my family share plan coming out equal in cost, neither is a better deal than we have now. So thankfully, at least AT&T gave us the option of keeping our current plan, rather than forcing us to move into the Mobile Share plan if we attempted to upgrade our phones. In the end, choice is good, but I’m not convinced we as consumers have been presented any good choices.
Update 7/30/12:
After making this post, I remembered that the Wall Street Journal reported AT&T has seen a rise of Smartphone users driving profits up. This would indicate the likely driving factor behind discounting the smartphone access charges on the scale from $45 to $30. Since it is easier to consume more data on a smartphone than a feature phone, AT&T benefits from selling higher tiers of data while appearing to offer a discount to smartphone customers.