After five years of charging users on their data use, AT&T brings back all-you-can-eat data plan, but only for subscribers of its U-Verse and DirecTV services. The company declined any association between the recent decision and T-Mobile recently released free data plan ‘Binge On.
Free data plans, seemingly, are the industry’s most recent strategy to keep old users and lure in new ones without the need to start a price war. The new data plan will be available as of Tuesday.
Wireless carriers experienced a surge in mobile data traffic in recent years since more and more users watch videos from Netflix and YouTube on their smartphones or tablets.
A report issued by Cisco Systems shows that an average user in the U.S. now needs 3.2 GB of mobile data on a monthly basis. Six years ago, the same user required only 1 GB per month.
The nation’s two top wireless carriers have been debating for years whether free data plans would be a good idea in the context of increased data traffic. A surge in traffic also needs upgrading the network to prevent congestion.
This is why AT&T discontinued its initial free data plan more than 5 years ago. The decision was also an attempt to move users to Wi-Fi networks to avoid congestion and generate some extra cash from increased data usage.
A year later, Verizon followed in AT&T footsteps and ditched free data plans. Nevertheless, smaller carriers such as Sprint and T-Mobile did not follow suit.
AT&T recent move was designed to make users pay some extra cash to stay away from data caps. But as the number-two U.S. wireless carrier has now reintroduced its free data plan, smaller carriers may experience some difficulties and will need to come up with better plans.
Two months ago, T-Mobile unveiled Binge On, a service that does not charge extra money for usage of mobile data provided by a small group of content providers including HBO and Netflix. But the offer had some strings attached – videos are rendered at low resolution unless customers decide to turn off Binge On.
AT&T has recently bought DirecTV for $49 billion in an effort to make its offers more competitive than anything on the market. The carrier estimates that there are 40 million DirecTV subscribers that currently don’t have access to an AT&T service.
The carrier’s recently unveiled unlimited data plan costs $100 per month plus $40 for every extra line (the forth line, however, is free). Nevertheless, ‘unlimited’ means that after you used 22 GB of data, the speeds might be slowed to prevent network congestion.
Image Source: Flickr