New AT&T Smartphone Users Could Pay More for Network Access

In the coming months, AT&T looks to do away with a single price for all-you-can-use wireless Internet access. The new model from the provider for popular Apple products like the iPhone and iPad could signal a change in how the wireless industry charges consumers for wireless Internet access.

The company announced this week that it will phase out its current system that allows users to pay a fee for unlimited data packages and will, instead, switch to a pay as you go system. The new model will be for new customers. Existing customers will have the option to continue the one fee for unlimited service or go to the new model.

Newcomers will have two options: Under the DataPlus plan, subscribers can pay $15 a month for 200 megabytes of data; that would handle about 400 photos or 100 minutes of streaming video. The DataPro plan offers 10 times that capacity, 2 gigabytes, for $25.

AT&T will send text alerts to customers near their limits. DataPlus customers who go over will be charged $15 for an additional 200 MB. DataPro users will pay $10 for an extra 1 GB.

AT&T says 65% of its smartphone customers use less than 200 MB a month, and 98% use less than 2 GB.

But, largely due to the success of the iPhone, AT&T “has the most loaded and most used data network in the U.S.,” says Roger Entner, head of telecom research at Nielsen.

And just 3% of AT&T’s smartphone customers account for as much as 40% of its data traffic, contributing to slow transmissions and dropped calls. AT&T must control heavy users, or at least get them to pay more, Entner says.

With the limited airwave spectrum available for wireless broadband, he adds, it’s just a matter of time before other providers — including Verizon, Sprint and T-Mobile— switch to usage-based pricing.

Verizon Wireless CEO Lowell McAdam said last week that it would “make sense” to have such pricing later this year when his company introduces a speedy 4G service.

Apple’s new iPad tablet also uses AT&T’s wireless service. The new pricing will offer those customers 2 GB for $25 a month; current customers can keep their unlimited service offer for $29.99 a month.

IPhone customers who pay an extra $20 a month soon will be able to use the phones to provide Internet connections for laptops or other devices. That process, called tethering, will be available on 3G iPhones this summer when Apple releases a new operating system, AT&T says.