AT&T Lowers Rates for No-Contract Options

by Matt Klassen on December 6, 2013

While all four major American carriers have unveiled some sort of no-contract unsubsidized upgrade plan, AT&T’s Next plan immediately struck me as one of the worst of the bunch, an obvious reactionary marketing ploy that lacked the one thing customers were really looking for with no-contract options: savings.

In fact, there seemed little incentive to sign up for Next, given that customers would be on the hook for the full price of an unsubsidized phone, yet weren’t receiving any sort of discount on their service plans. But Ma Bell announced this week that it was tweaking its mobile share plans in an effort to give customers a break. The discounts are available to subscribers who pay full price for their phone, bring their own compatible phone to the network, or sign-up for the company’s aforementioned no-contract instalment plan Next.

But we’re talking about AT&T here, so we shouldn’t be surprised to hear that the discounts aren’t really that significant, simply another marketing ploy that positions Ma Bell’s Next as slightly more affordable than Verizon’s own Edge program; and while these changes are a concession that AT&T’s old model didn’t match the current industry dynamics, they’re still a far cry from the discounts offered by its two smaller competitors, T-Mobile and Sprint.

The mobile market inAmericais clamouring for low cost options, plans that offer both versatility and affordability that don’t leave customers locked in to binding long term contracts. T-Mobile was the first to tap into this growing market segment, and that company’s no-contract Jump initiative has seen an initial surge in consumer interest. While AT&T denies its own Edge program is simply a knee-jerk response to T-Mobile, the fact the company clearly gave little thought to pricing is a sure sign to me it rushed the plan to market, only now tweaking it like it would have wanted.

As CNET’s Roger Cheng explains, “By reducing its prices, AT&T is finally addressing the biggest knock on its prior no-contract plans: the lack of a discount that should come from not accepting a subsidized phone. T-Mobile and Sprint both offer no-contract options that offer discounted phone plans, and AT&T’s previous insistence on keeping the same subsidy-based rates with the debut of Next was the reason why many derided it as a poor deal.”

To find the savings in AT&T’s pricing shuffle one really does have to search, as there’s little change to data plan rates. The real break for no-contract Next subscribers comes in the device fee, that little monthly add-on that makes all these no-contract options feel just like those old binding two-year agreements. Previously AT&T offered a sliding scale for smartphone fees, ranging from $50 coupled with the lowest data allotment down to $30 for the larger data plans. AT&T is now changing that to a flat fee of $25, offering some savings to those at the bottom end of the data scale.

As I mentioned, while AT&T’s pricing changes offers slightly more affordability than the company’s old plans, they’re still not a good a deal as T-Mobile or Sprint. In fact, it seems the company has cut just enough off its plans that it can legitimately claim it’s a ‘better deal’ than Verizon, as its obvious the stingy cuts don’t actually have subscriber savings in mind.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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