AT&T Has "Not Made Any Decision to Implement Tiered Pricing"

AT&T Mobility CEO Ralph de la Vega has told the Wall Street Journal that despite what he said back in October and earlier in December:

"We have not made any decision to implement tiered pricing."

Which is a weasel-wordy way of saying, contrary to previous statements that suggested they might do just that, AT&T isn't planning on charging customers by the byte -- yet. And they're still going to call their plans "unlimited" even as they try to get customers to use less 3G data via:

  • More WiFi hotspots
  • Microcells (femtocells) which re-route connections through your own broadband cable or DSL modem, effectively creating a mini cell tower in your home.
  • Incentives (though de la Vega declined to comment on what those might be exactly)

Thanks in large part to the iPhone, AT&T data volumes have shot up 5000% and, according to a lot of recent blog-spun controversy, they've seen profits increase as well while simultaneously investing less and less in the network meant to support that usage.

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Rene Ritchie

EiC of iMore, EP of Mobile Nations, Apple analyst, co-host of Debug, Iterate, Vector, Review, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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Reader comments

AT&T Has "Not Made Any Decision to Implement Tiered Pricing"


Correct me if im wrong, but if they end up changing the way the prices/data are charged , I would assume that would be for new customers only? If not we would be able to easily walk away from our current contracts?

I believe that's correct. And if that happens and verizon gets the iPhone. Than AT&T will be watch herds of customers leave. It will be at that point AT&T will realize how bad they f@"$ up.

When you sign up for unlimited data plan it means just that.... I agree if they change it then the contract is up and the IPhone is elesewhere then users will leave :(
I don't think AT&T stupid enough to do that ?? I think they need to expand their backbone infastructure.....

It is interesting that some of the choices include shunting traffic to WiFi. This has the effect of moving ATT traffic to some other carrier's internet connection.
If the affected ISP doesn't like that, then (without some sort of net-neutrality) the ISP could throttle the ATT traffic.
We'll see this sort of thing until net-neutrality is fully debated and a policy is enacted. In the meantime, look for more means for wireless carriers to use the cable providers' networks for free.

I rather pay for tiered pricing my wife uses less than 1gb for sure. I use less than 3 always. No reason she should pay 10 dollars a month and me 30 or less.
Data should be like a utility like water. You pay for what u use not a flat rate.

Here's what i'dlike. For a couple of years, i paid the same data rate for Edge coverage that someone paid who had 3G.
That sucked. Now that i have pretty decent 3G coverage, i'm not as mad.
But I'd be ok with a data cap of say 5gb. Charge double for "unlimited" AT&T has me by the iphone. Verizon doesn't even offer coverage in my area. So unless Apple is going to sprint, my options are limited.
That would be interesting though. What would an iphone do for Sprint? Can't think of a better way for Apple to put the screw to verizon. Apple could probably get Sprint to agree to anything. And sprint's 4G is coming along.

I love the iPhone but if they start changing data plans I'm gone. Bad enough I have to deal with crappy coverage.

@cardfan. You must live in never never never land for verizon to not offer coverage. Not a fan of their high prices but on a map3g/non 3g they pretty cover the u.s.

Both my wife and I have iPhones. We pay $30/month per person for data services. That's quite a bit more than we pay for unlimited data via our ISV at home and their service is a lot faster than 3G. AT&T really needs to think long and hard on this one. Any caps at a $30 level put them into a place where they are the outlier in the market for data services, both mobile and land-based, forgetting the PR nightmare that would be associated with it. Their best bet would be to drop exclusivity, let some customers go to other networks and let those carriers feel their pain a bit. At that point they can grow their network at a more reasoned pace, maintain profitability and deliver a better experience to their customers.

I have a family plan and we both constantly use less than 1-2GBs a month. I believe in tiered plans for those that use less, BUT getting rid of the 30 unlimited isnt a good idea. Reward those that dont use that much. I personally would love to see family shared data plans. Give us 5GB for $30 or so to share with rollover data. They also need lower family shared texting plans. Between both lines we use less than 1000 combined, but our only option is $30 for unlimited. Id gladly pay $10 for 1000 shared or $15 for 1500 shared text. In my opinion I think AT&T really neglects their family plan customers. Its sad that I live in a 3G area, but many times cant get a good connection, or switch to edge and sometimes I get stuck on GPRS. Its sad I have to use my Verizon MiFi to place a skype call or use data when im out and about. If something doesnt change, I too will be looking elsewhere

On the subject of contract terms, all current users would be grandfathered. I was AT&T Wireless (aka Cingular Blue) until Oct. 2008. I had been out of contract for several years but still had unlimited incoming texts for free and free roaming in Canada which had not been offered for some time. As soon as one takes a new device, new terms can be implemented.

AT&T should:
1) lose iPhone exclusivity;
2) sell smartphones with poor designs which limit the desire to use data intensive applications;
3) start promoting misleading metrics about how its network is improved and performs better than other networks;
4) start favoring notebook data plans over smartphone data plans.
If it comes down to AT&T requiring 'unlimited' data plans but then paying 'incentives' for not using data, it would only be doing that because doing so would be more profitable than improving its network. It would have the same effect as having tiered pricing, but psychologically it would seem superior. With tiered pricing, if you go over your limit, you get an added fee; you expect to pay, let's say, $15, but once in a while you get hit for $30. With incentives, if you stay under a set limit, you get a credit; you expect to pay $30, but you are actually expected to pay only $15.
Just some speculation.

@james: Verizon's map is a lie. They are including roaming agreements as their own coverage. I have driven between DFW & California many times with a VZW phone, and it's very frequently on a roaming partner. VZW is showing that as their own coverage, though. We actually cancelled VZW after moving to Texas because their coverage was lousy and CS gave us the runaround. T-Mobile and AT&T have had excellent coverage out here.
As for the microcell/femtocell idea, I think it's great. So WHAT if it's using your internet connection? If you have a monthly cap, then don't get one. But for the rest of is, they're a great idea if their test area pricing is what they use. $19/mo and you get unlimited airtime on up to 5 phones and unlimited data too. This would be great for us because we could drop our plan down by $50/mo. My wife talks a LOT but the majority of her minutes used are right here at home. Same with the kids - most of the calls they make are from home. A femtocell would be great. It would also be great during bad weather. We have experienced cell service outages during severe weather (it affects ALL carriers - our VZW friends too) but my fiber internet (FIOS) remains up. A femtocell would be our own cell, and less likely to be affected by severe weather.
I think they're a great idea.

I have no problems with AT&T, my iPhone never drops calls and I always have fast 3g.
I've finally found a positive to living in Kansas.

Femtocells don't make a whole lot of sense if we're talking about smartphone data. If you're at home with your wifi network, you wouldn't purchase a femtocell so that you can use 3G data. For cellphone reception, sure.

Chock-holders as impotent as their their voices are shrill.
Film at Eleven.

I am sooo tired of people saying that Verizon's prices are higher. I have a BlackBerry and I would be paying the same if I had AT&T. Sprint and T-Mobile are cheaper, but their networks suck in the SF Bay Area.