How Is AT&T's New $60 Prepaid Unlimited Plan A Good Idea?
AT&T put a press release out today about a new plan they're introducing on Monday, billed as a $60/month unlimited voice and text prepaid plan. While this plan is more competitive with smaller, prepaid-only carriers such as Boost Mobile, it's also significantly cheaper than similar regular plan options. So what are they thinking?
Writing to us about the new plan, reader Sean mused:
What I can't understand is why they would offer it? GoPhones are the prepaid option for people who can't pass a credit check or don't use too many minutes. Usually they are a worse option than normal contracts as far as the price per minute. Here is my problem with it though. If you want to do this same thing under contract, it would cost you $100/month ($40 price difference/month or $960 over the life of a contract assuming that you used your phone every day). I'm hard pressed to find a catch, but as I've learned from the consumerist, there always is at least one. My question is why would anyone not want to take advantage of this option?
It's hard to say, since the details of this plan and any possible catches won't be out until Monday.
It could be that AT&T is going after a text-crazed teen/young adult market who are uninterested in smartphones and mobile internet. Those customers won't be interested in long contracts to subsidize expensive phone purchases.
Any other ideas? If you're using a basic prepaid plan, would you consider switching?
Let Freedom Ring with New GoPhone Unlimited Talk and Text Feature Package [Press Release]
(Photo: epicharmus)
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Comments:
Im still putting off a phone purchase in fact, because I dont want to get into a contract and I dont want to pay useless sums of money.
Prepaid options in this country are a joke. Even the Irish carriers got it right there: How dare these companies charge me for receiving calls? THAT makes no sense.
@taking_this_easy: I agree. $60 is what I pay for my 2-line family plan (well, $70 with taxes and such) and if I wanted a pre-paid, no contract plan it would end up much, much cheaper - probably around $30 a month.
Boost mobile has a better plan $50 including tax for unlimited everything. only problem is that they got some crappy phones unless you get a boostberry
I pay $30 for 300 minutes/60 days of service with Net10. I don't use my phone that much, and the minutes I don't use roll over, so I haven't have to worry about running out. There is no ETF which is one reason I did that.
I have AT&T for a landline and DSL, but it's expensive. I'm not sure about this. I'd like more information so I think I'll wait and see.
Here is the poteltial upsides for ATT:
1) Lure a whole bunch of people over then bump up the rates, as they are not under contract, ATT is free to do this (most people will be too lazy to switch)
2) Use it as an upsell. "For $49.99 a month you can get 400 minutes, but for just $10 more you can get unlimited. While most people on a prepaid would not use over 400 minutes, they can upsel them on the insurance that they will never get an overage fee, so the extra money will compensate for the few who might actually make use of the unlimited minutes.
This is easy. It's $60/month, unlimited. But only for that month. When the month is over, poof! End of service. No matter how long you talked or how many texts you've sent. AT&T has undoubtedly done least cost analysis and found that most people will use much less than $60 worth of service under this option. The few who use more will easily be offset by the guys whose eyes are bigger than their stomachs, so to speak.
That's why you offer an option like this. To give the greedy something they think they'll use, but ultimately never will.
Seeing as it's prepaid, maybe they are finding a huge default on contracted customers? With prepaid, maybe they are finding a better margin of paying customers and opening the market for more customers with credit issues. Collecting on early termination fees, subsidizing phones and such might be taking it toll.
If you have to buy your phone or use an existing one, pay every month or be shut off... maybe this has a better chance of gaining profit? The low price will attract new customers, without contracts on top of that. The contract customers are paying more, but they also get the benefits of upgrading phones and such. If this plan is as basic as they are advertising, people shouldn't be putting it down, they should be celebrating. A simple, unlimited plan.
I'm sure there are a few pitfalls, but overall, this might be a great move on their behalf.
Another reason for Iphone users to be pissed off at Att.
It's hard to say, since the details of this plan and any possible catches won't be out until Monday.
Well, isn't it probably the case that one of the "details" of the unlimited plan is an asterisk that says *(Not really).
@HogwartsAlum: I'm doing the same thing, and I've been quite pleased. Net10 uses the AT&T network here, and the coverage and call quality have been superior to my old Sprint contract. A la cart text messaging is cheap, too, at 0.5 minute ($0.05) per message. Sprint was charging me $0.15 per message.
I did have a slight problem with porting my old number in, but Net10's tech support straightened it out pretty quickly.
I use Cricket, personally. It's not good "everywhere", just in major markets, but it's cheap - $33 a month (family plan with 3 or more phones. We have 4 phones, so I pay $132 a month). That includes unlimited long distance, unlimited text, picture messaging, call waiting, 3-way calling, and Unlimited use in all Cricket markets.
That would cost me $240 on AT&T?
No thanks.
Seems like a solid deal if you like AT&T's network.
Oh, that explains it.
I've been using Cricket for almost 3 years now. I have the unlimited package which costs about $60 per month with unlimited text, voice, voicemail, and internet. I like it. No contract, no hassles, no strings. The technical support is about useless, mainly because the heavy middle eastern accents make it difficult to understand what they are saying.
@Southern: If you add the optional roaming package (think it's $5 extra) you can use your Cricket phone just about everywhere. I travel with mine and have only encountered a lack of service when I'm way out of the main city. Pretty much the same holes I had with Sprint. Plus, Cricket's network is better by far capacity-wise and issue-wise. I talk, text & send e-mails, pictures, etc. like I did with Sprint but it's one flat fee per month (in this case $40). With Sprint the same use would have cost me $80+ (had to add the data bundle, then the picture bundle, etc....RIP OFF). And best part? NO CONTRACT :) Love them!
@Rachacha: Both AT&T and Sprint have had to come up with these plans to compete with carriers like Cricket. The no contract/no credit check customer market they serve is huge (judging by the line of people at my local store). I use them - $40/month unlimited everything (text, talk, pictures, LD...). When I travel outside of the big cities, I simply go online and add the $5 roaming add-on and I'm good. Only places I've had coverage issues were the same ones I had with Sprint. Best part? NO CONTRACT! And their network rocks. Count me happy with Cricket :)
@Overheal: I'd say being charged for receiving texts is far worse-- you can always refuse a call, but it's much harder to do with texting.
My Net10 phone only charges me for texts when I actually read them. If I delete them unread, I don't get charged.
Obviously the only subscribers that AT&T still has are iPhone users who are locked into contracts when they buy the phone.
This may have something to do with Sprint offering unlimited calling to any mobile phone on any network, on all their plans.
Hmm.. This is not a savings over what I already have, but unlimited minutes...
Were that I used more than 100 minutes a month, I'd go for it. I'm already paying $60 monthly for 450 minutes & texting, but I only use about 100 minutes because everyone I call is on AT&T. Its bull.
Unlimited voice AND text for $60? If this is the case, than AT&T's comparable postpaid plan is actually $120! And for people who don't need unlimited mins, it is equivalent to their $60 a month 450 mins w/ unl. text plan. Sounds like a pretty good deal (For AT&T at least)
The obvious catches are here is not being able to use iphone data and the fact that AT&T's gophone services only use AT&T towers, so there is reduced coverage. So the two biggest users on their network ,the iPhone customers and the Business "I need reliable service" customers, aren't going to be drawn to this. Also, we all may have negative views on subsidized phones, but not everyone does. Customers who come in and pay their bills with change usually can't afford to buy a cool $200 phone they normally would get for free. That's a big selling point for some people!
I still don't see how they can afford to offer something like this, but they're just trying to get competitive with companies like boost and cricket. I love competition!
There has to be something in the fine print that hurts this deal...
To answer the "why do they offer this?" question, it's because lots of other carriers are offering the same thing and AT&T needs to stay competitive (Boost was acquired by Sprint).
These prepaid all-you-can-eat plans are proving very popular in certain market segments, and are very profitable for the mobile phone companies. Not only is there no phone subsidy to recover, but the cost of servicing these accounts is very low: no collections problems, no customers calling to check their minutes, no disputes over billing or usage.
This may be one of those situations where what benefits the company also benefits the customer--it's fairly expensive to provide all the service and support which inherently comes with the postpaid by-the-minute business model.
If you are looking for a super cheap non-contract plan then check this out:
1200 anytime minutes / 1200 texts / 50mb Data / $29.95
[sanfrancisco.bizjournals.com]
its on the verizon network:
(map: [www.pagepluscellular.com] )
I live in Boston and within the past year 'Metro PCS' has sprung up on every corner. THEY ARE EVERYWHERE!!! $50 Unlimited voice, text, data, 411. I can only imagine that AT&T is trying to keep up with them and carriers like them (IE. Boost).
I have a G1 and about 6 months ago T-Mobile put me in a "Loyalty Plan" which is $50 for unlimited voice. I still have to pay $25 for Android + Texts. Better than $99+ anyway.
Not worth it. Why get the ATT $60 unlimited prepay when Boost Mobile or Cricket or Metro PCS offer more features for less.
T-Mobile $100.00 fully year, rollover for current mins no body calls me anyway - thank God! I do text my GKids & their mommas :)
@ianmac47: Umm, some of us were satisfied AT&T customer before we got our iPhones. But now that we have them, we're ecstatic.
@Paladin_11:
Exactly. This is basically "subscription" cell phone service. Some users will take full advantage of the unlimited minutes, but there will be plenty of others that will barely go over 300 minutes a month.
The $60 a month is the sweet spot where ATT can still make a profit between the heavy users and light users. Also, I'm pretty sure this unlimited plan will require auto payment (credit or debit), just like their current Pick Your Plan pre-paid service.
I don't see this as a bad thing really. The subscription business model works for Netflix, GameFly, and others. It should work for ATT.
But I have a feeling that ATT will be restructuring their current Pick Your Plan service, and will probably force some users to upgrade or downgrade to a different service tier.
@Overheal:
You get charged for receiving calls because (at least historically) there's no feasible way to charge callers for calling mobile phones. In most other countries cell phones use phone numbers that are readily identifiable as being cell numbers and thus people who call cell phones can be assessed the additional costs of terminating the call. In the US a cell number looks just like any other number, hence the inability to do this.
@Verucalise(countingcalories): It will attract some of my financially irresponsible friends, who want AT&T (they liked the service they had when work was paying for their phones), but don't qualify for a real plan, because they're bums.
Maybe because the prepaid part eliminates a significant amount of billing errors, unpaid statements, etc.? Maybe it's worth it to them to cut the price for people who are prepaying. I'm willing to bet a lot of people these days aren't paying their bills or are cutting service.
@Neurotic1: Yes, please tell, why am I supposed to be pissed off? I pay $80/2 lines (yes $40/line) for unlimited data and more minutes than I can use in a month. Why would I be pissed that someone else is paying $60/ month for a "dumb" phone and stillmore minutes than I could ever use. I don't do any texting, so for me that offers no advantage.
@JennQPublic: Oh, so you are the other person that is very satisfied with AT&T. I have been an ATT customer for almost 13 years, and have been quite happy with their service.
The non-contract price should be cheaper. With no contract, it means no subsidised phone, so they dont have to make their money back on that. This makes perfect sense to me.
Years ago I tried an ATT Go Phone--before it was a big deal. I wanted to save money. Well, my reception stank. BAD. I called them and they said (again, a few years ago) that the prepaid weren't like the regular ones as far as reception and service (don't ask me details--don't recall). It was BAD though. I switched back to a regular contract since my credit was fine, and didn't have problems. I have a friend now with an ATT GoPhone and whenever she calls me (I have an iPhone) she breaks up and echoes, always. My other callers don't. I think the catch has something to do with this.
@Rachacha: The ATT of today has not been around for 13 years.
If anyone remembers I was greatly happy with AT&T Wireless back in 2004, they had some of the lowest rates ever.
Sadly shortly after I started service they were acquired by Cingular. Shortly there after that, SBC Global purchased Southwestern Bell based in Atlanta and gained control of the rest of Cingular which was held by Southwestern. Now we have AT&T Unity?
It's really not the same. :-(
@idip: I've had the same service for 11 years. It was PacBell Wireless, then Cingular, then AT&T. Overall, I've been satisfied the whole time. I've had a couple of issues, but nothing major. For a large corporation to go 11 years without pissing me off is pretty impressive, actually.
Several times I've been out of contract when I needed a new phone, but I chose to stay with AT&T. When a company's giving you good service, why would you leave?
Perhaps is is simple as wanting to draw in more customers without adding more stress to the network that we constantly hear is bending under the weight of data usage from smartphone users.
Sprint! 5 lines 2000 anytime minutes, unlimited night and weekends starting at 7pm.. unlimited mobile to mobile, unlimited data, unlimited text.. $130/month
Oh and did I mention nation wide 3G ;-)
@LatherRinseRepeat: This isn't actually a "plan" per se, it's a feature that you add to the Pay As You Go Simple Plan - normally $0.25/minute. PAYG doesn't offer an auto payment option that I'm aware of.
It does seem odd to have this versus the Pick Your Plan options though.
There's one big reason why this is SO cheap that everyone here has overlooked: Go here, click on GoPhone -
What's that you say? Yes, the coverage for GoPhone is literally HALF of what it is for post-paid plans. GoPhones aren't allowed free domestic roaming on AT&T's roaming partners.
That's right, GoPhone service is half the price because it's half the service area.
And as one other commenter said, they also don't subsidize the phone. You have to buy your own, full price (Craigslist!), no new phone every year or two.
You really think AT&T would just start giving away their service for half price? HA!
Page Plus IIRC, offers an unlimited talk and text for $35 a month.
I am a Go-Phone sub using my BB Pearl to snag Wifi for my email and just all around be cheap as possible.
I understand now why my rewards are going away [Every $100 you bought you received $10 back]. Was disappointed to see the message sent to me and thought about moving to another prepaid sub.
Why? You get a much nicer phone, with more features, on a contract (in most cases). Whether it's enough of an improvement over the no-contract phones to warrant the extra cost is up to the individual; very much a YMMV thing.
@ianmac47: Count me in as one of the apparent few who love AT&T. I've had them since 2005, and have rarely had problems. AT&T and Verizon are the only two carriers with decent service in our area, and Verizon's plans offer around $20/month more than AT&T's. Plus, I can use my iPhone on AT&T. I love my iPhone... Made the jump from dumbphone to iPhone earlier this year and can't get enough. Plus, whenever I've had a problem I've actually found that I love their customer service.
if I'm not mistaken AT&T pre-paid doesn't have the roaming capabilities that their post-paid counterpart does. So you're essentially paying for crappier reception.
you'll have to buy (or reuse) your existing phone, and no subsidized upgrades....
i would switch if there was a family/shared aspect, but currently paying $69 (after college discounts) on at&t, sharing 700 minutes on 2 lines with 200 txts on each line... don't probably need unlimited