The real cost of AT&T's basic data plan

The real cost of AT&T's basic data plan

Summary: AT&T's $15 per month, basic data plan can add up quickly if you use more than the allotted 200MB of data. Here's a look at the numbers.

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A guest blog by Rob Lee.

I just got off of the phone with AT&T business customer care where I was discussing the $15/200MB data plan versus the $25/2GB plan.

I uncovered what could be a very expensive proposition for anyone signing up for the $15/month, basic data plan.

Here is a recap of the numbers:

  • Monthly Fee $15 -- Data Cap 200MB
  • First Overage +$15 -- $30 -- Total Cap 400MB
  • Second Overage+$15 -- $45 -- Total Cap 600MB
  • ...
  • 9th Overage +$15 -- $150 -- Total Cap 2GB

If you sign up for the basic plan and use 2GB, your total cost for the month will be $150.

On the other hand, the $25 per month/2GB plan has an overage fee of only $10 and adds another 1GB to the total cap for the month. So the first overage would cost $10 and deliver 3GB of data -- all for a total of $35.

Most people don't realize the magnitude of the charges they will incur with the $15 data plan if they go over. It's much like the old cellular minute plans, where the lower the commitment, the higher the penalty for using the service – this is the same abusive service model.

AT&T stated that this is the contractual arrangement they have with Apple to supply data and knowing that Apple gets a residual on the data plan revenue from AT&T, I believe that Apple were quick to want this pricing model in place.

This is an item which will cause a lot of ill feelings and fodder for discussion once the issue is made public in a clear way.

Topics: AT&T, Banking, Enterprise Software, Hardware

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20 comments
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  • While true...

    There is one element left out. Anyone who monitors their usage can retroactively change their billing plan during the period. AT&T will also I believe send you usage warnings? Not to apologize for ATT whom I HATE, however I did this yesterday concerning some international travel fees on data and saved quite a bit of money.
    jessalbert
    • Its a pain to be an ATT customer

      Wonder how many of the 1.7 million iPhone 4G users will end up complaining about this. A lot for sure.

      Wise advice, choose that protects your pocket. ATT sure doesn't.
      Uralbas
  • Complaining will only come from the unthinking victim-hood types.

    And they'll have no validity to their complaints.
    People
  • Surprised?

    AT&T undoubtedly did an analysis of users to come up with the 200MB number. The average user probably uses right around 200MB with a high probability of using a few bytes over 200MB. The user thinks they will be saving money, but more often than not end up paying the overage fee. Bingo for AT&T more revenue.

    Where do you think the profits go? Upgrade infrastructure to improve throughput and user experience? Na. Bonuses to idiots who come up with lame pricing plans.

    BTW: Why should Apple get a percentage of the data plan if I use a smart phone and not an Apple iPhone/iPad?
    7mgte
    • RE: The real cost of AT&T's basic data plan

      @7mgte [b]BTW: Why should Apple get a percentage of the data plan if I use a smart phone and not an Apple iPhone/iPad? [/b] That IS a good question... one would hope that AT&T would have the technology in place to identify which of it's customers was using an iPhone as opposed to a Blackberry and for whatever reason give Apple the percentage for the iPhone customer rather than the Blackberry customer. But yeah why is Apple getting a percentage of data use plan costs?
      athynz
    • RE: The real cost of AT&T's basic data plan

      @7mgte Who says that Apple is getting a percentage of the data plan not on an iPhone/iPad?
      msalzberg
  • Why can't they do it simple way?

    Why can't cell phone companies do it the easy way without annoying customers? Why not charge customer that goes above 200mb limit extra $10 and raise the limit to 2GB instead of charging $15 for every 200mb. There should be no price difference if one downloads 1GB with 200mb or 2GB plan. Or is it too simple?
    paul2011
    • RE: The real cost of AT&T's basic data plan

      @pauliusp

      If you were in business to provide a service, and that was your primary mission, then that would make sense. However, you also wouldn't technically be a business - by today's standards, anyway. They, like any other business are "in business" to make money, period. Providing a service is secondary. I know it sounds cut and dry... but when you boil it all down, that's all there is to it: buyer beware.
      SnifferSir
  • You expected something different?

    Every so often, I get mail from AT&T and my other service providers telling me how they have "improved" something. Invariably, what it really translates to is how they have improved their profit margin at my expense. This is right in line with all my other experience with AT&T.
    terry flores
  • You can backdate a change to the data plan

    I just double checked this after noticing it when I changed my data plan down. If you go to AT&T and change the features on your phone and select the 2GB plan, step 2 of the process is when you want it to take effect and they give you three options. 1. Backdate to the first day of my current bill cycle, 2. Make Effective today, 3. Future date to the next bill.
    If you select the first it seems to retroactively change your data plan to 2GB. The question is how do they bill it?
    So keep an eye on your data usage and know your billing dates if you go with the 200MB plan.
    alexwt
  • RE: The real cost of AT&T's basic data plan

    the numbers given by AT&T in training are: average iphone user uses 400 MB. So Iphone users should be on the 2 GB plan. 98% of users use under 2 GB. I'm not remembering what the number was for users with phone first devices, but it was well below the 200 MB.

    So basically, if someone gets the 200 MB plan on a Iphone or smartphone, the rep is going to be trying to convince them to get the 2 GB plan(they won't likely skip this, as they get paid more for higher plan), saying they will likely go over. If a customer insists, how can AT&T be to blame?

    If someone really gets the 200 MB plan, and goes over by 900% without some extenuating circumstances, I'd say blame falls on the user.
    kevinrs1
    • RE: The real cost of AT&T's basic data plan

      @kevinrs1 In their announcement of the new data plans, AT&T stated that about 60% of their users use less than 200MB.
      msalzberg
  • AT&T gives you a handy tool to figure out your needs...

    if you go to their website and login, you'll see a link to "View my data usage." Using that, I can see that my monthly data usage for the last 1 1/2 years has been between 55.9MB and 175.8MB.

    Given those stats, it's a pretty safe bet that my $15 basic data plan will cost me $15.

    Stupid article.
    msalzberg
  • RE: The real cost of AT&T's basic data plan

    This is the one issue I have in my choice of whether to purchase an iPhone or go to Sprint's EVO or Palm Pre with the all inclusive $99 a month. It will be interesting to see how this price plan at AT&T will really affect sales of the iphone after this first launch mania. I'm sure there's going to be a lot of people complaining.
    http://www.businessissuestoday.blogspot.com
    audreypeters
  • RE: The real cost of AT&T's basic data plan

    Let's look at this differently. If you are on the basic plan and you exceed your allowance, you get a 100% adder (200 to 400MB) for a 100% adder ($15 +$15). On the other hand, the larger plan gives you a 50% bonus (2GB to 3GB) for a 40% increase ($25 to $35).

    You could also say that for $15 I get a 100% increase in my data on the basic plan while the other plan charges $10 for a 50% increase in data.

    No matter how you slice it, you can find fault with it. Aside from the fact that you can retroactively change your plan, the real cost argument is silly.
    rabber
  • Many excellent points here

    In contributing this piece today I wanted to just highlight that AT&T has continued to use a pricing model from the earliest days of cell service, where the lowest level of users pay the highest rates. I won't argue that as a business model this is wrong, but what is wrong in my opinion is the continuance of an antiquated revenue model.

    For those of you commenting on the retroactive choice to switch the plan, I was offered that through the phone call today, but was told it would not be available online. Perhaps the lesson here is inconsistent information from AT&T sources, which leads to confusion for the users.

    And yes, monitoring the usage, gauging the likelihood to exceed the usage level, and proactively addressing it makes a lot of sense. And my own experience is that I use about 350MB of data use on 3G in a typical month, within the 98% grouping AT&T has targeted as it sweet spot.
    rftrel
  • RE: The real cost of AT&T's basic data plan

    That is why I'm sticking with my "unlimited" plan until AT&T forces me to change and when that happens I'm gone.
    athynz
  • RE: The real cost of AT&T's basic data plan

    Of course, this pricing is only available for smart phones. The LAPTOP data plan is still much worse.
    jrp@...
  • RE: The real cost of AT&T's basic data plan

    The bottom line is 200MB will be plenty for most iPhone users. You can even check you data usage history on AT&T's website and see if you go over 200Mb and how often. My iPhone 3G is jailbroken and has tethering capability. I've yet to break 500Mb. I don't use my iPhone to stream video regularly, I use it for email and to browse the web, like most users do. Although I think AT&T is a rip off and their prices criminal, it's time people take responsibility for their own actions. No one is forcing you to buy an iPhone or to switch to AT&T. By now most people know the pitfalls associated with the iPhone and with AT&T and their service, but it's clear to me that people don't care. Apple sells 1.7million iPhone 4 in just 3 days, people are renewing their contracts with AT&T so all this complaining and whining is getting old.

    If you're not happy with the iPhone or AT&T get a Droid phone and select another carrier. Verizon is no better, their pricing is the highest of all carries and they have already announced their intentions to copy what AT&T is doing. Sprint still has the best deals available, but even they are charging an extra $10 for 4G regardless of whether you live in an area with 4G or not...
    Masari.Jones
  • RE: The real cost of AT&T's basic data plan

    The att data plans are the reason I will not switch back to att as much as I do like the iphone. Data does not have to be unlimited but even 2gig is cutting it short for a person that buys an iphone and really uses it. I think 5 gig is the magic number. My days of paying overages are over. Att looses me as a possible customer and apple has a Mac fanatic saying that Android is really cool. I'm currently on t?mobile with faster data speeds, much higher data limit and it costs me about $30 less a month then att.
    vamp07