AT&T Retires $10 Messaging Plan For New Customers

AT&T is retiring its Messaging 1000 plan on Aug. 21, leaving new customers with just two messaging options: an unlimited plan or a pay-per-message basis.

AT&T said the move to retire Messaging 1000–which afforded customers 1,000 text, picture, or video messages each month for $10–is meant to streamline its messaging options, especially since the vast majority of its customers prefer unlimited messaging. However, the company said current Messaging 1000 customers will be grandfathered into the plan and can continue to use it even if they change handsets, according to Engadget.

New customers, though, will need to buy an unlimited messaging package or pay for each individual message they send. The unlimited option will be available to individuals for $20 and to families for $30. The pay-per-message option will cost 20 cents for each text message and 30 cents for each picture or video message.

Earlier this year, the Wall Street Journal looked into text messaging use and found that the growth of text messaging is slowing sharply. Text messaging in the second half of 2010 increased just 8.7 percent over the prior six months, the slimmest gain since messaging exploded during the last decade. The lack of growth is a concern for carriers, because text messaging has low costs and high margins. The Journal cited a report from analysts at UBS that said carriers make about 80 cents of profit per dollar from text messaging, compared to about 35 cents per dollar from voice and data services.

Phone makers are also allowing consumers to send messages via the Internet, reducing the need for text messaging. BlackBerry Messenger allows consumers users to send messages between BlackBerry devices, and Apple said its upcoming iOS 5 system will include a messaging service called iMessage. Mark Collins, AT&T’s senior VP for data and products, told the Journal that he expects demand for texting to persist, though, because it allows consumers to send messages to people with different devices.

AT&T streamlining individual messaging plans August 21st, leaving unlimited as the sole survivor [Engadget.com]