O'Grady's PowerPage

Tag: February 10

  • AT&T pulls out unadvertised data plan pricing loophole to retain customers

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    When in doubt, match your competition’s offer.

    Per the Associated Press, AT&T is reportedly offering some customers unlimited iPhone data plans in an attempt to keep them from defecting to rival carrier Verizon, where Apple’s handset will launch on February 10th.

    The report states that AT&T is employing an “unadvertised loophole” in an effort to retain some subscribers who contact customer service. The carrier is said to be quietly offering the option to customers who had a previous version of the iPhone prior to June 2010, when the carrier offered an unlimited data plan for US$30.

    Though AT&T wouldn’t confirm the option, the report cited a resident of Brentwood, N.Y., who said he and a friend were switched back to an unlimited plan after they contacted the carrier’s customer service and threatened to swtich. Both subscribers are iPhone 4 users who owned a previous version of the iPhone with an unlimited plan.

    AT&T introduced tiered data plans with lower pricing in June 2010. New customers can receive 2GB of data for US$25 per month, or 200MB for US$15 per month.

    Customers who signed a contract for US$30-per-month unlimited 3G data prior to last June can keep the plan until their two-year contract expires. Those customers have been able to keep their unlimited plan when upgrading, but the ability to switch back to unlimited, after choosing tiered, has apparently been secret.

    Claims that AT&T is offering some customers an unlimited option come as the iPhone 4 is just weeks away from going on sale for Verizon customers. This week, the carrier revealed it would offer unlimited data for iPhone customers for US$30 per month.

    Verizon Chief Operating Officer Lowell McAdam said Verizon hopes its unlimited offering will help the carrier attract more customers away from AT&T. He said canceling the company’s unlimited plan would create a barrier for customers who might otherwise switch.

    “I’m not going to shoot myself in the foot,” McAdam said on Tuesday.

    Still, Verizon’s unlimited data plan will only be available for a limited time, as the carrier has indicated it intends to move to a tiered structure with caps on monthly data use, much like AT&T did last June. Verizon has not indicated when it will adopt tiered plans, but the company has expressed interest in making the change in the near future.

    When AT&T capped its plans last year, the carrier noted that 65% of its smartphone customers use less than 200MB of data per month, and 98% use less than 2GB per month. To soften the blow, the tiered structure came with lower prices, as AT&T now charges US$5 less per month for its high-end 2GB plan than it did for its unlimited plan.

    Stay tuned for additional details as they become available.

  • Verizon announces iPhone, will begin selling units on February 10th

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    You’ve been hankering for it for over a year.

    And now it’s less than a month away.

    Per Reuters, wireless carrier Verizon will begin selling a version of the phone on February 10 at the same prices as AT&T Inc.

    “I’m going to switch right away. I’m going to go back to Verizon,” said Raheem Noble, 24, a New York City rapper, who was on his way to buy the device before being told that pre-orders would not begin until February 3.

    The new phone puts an end to AT&T’s three-year-old status as the exclusive U.S. provider for the iPhone — but leaves questions over how much Verizon Wireless would be able to capitalize on the deal with Apple.

    For one, Verizon did not say on Tuesday what it would charge for its iPhone data and service plans when the phone goes on sale. There were expectations that it would trump AT&T by offering the device with unlimited data service plans.

    Verizon likely will announce those prices before pre-orders begin on February 3, said Verizon Wireless Chief Executive Daniel Mead. He said he was prepared for “unprecedented” demand.

    The phone will not work all around the world because it runs on the CDMA network, which is not supported in many big markets such as the United Kingdom and France.

    In addition, Verizon’s first iPhone customers may buy a phone that is outdated only months later if Apple upgrades the iPhone on its typical early summer launch schedule.

    “Some buyers may want to wait for a new iPhone that is likely coming in June. I already had people coming to me asking, ‘should I wait?’” said BGC partners analyst Colin Gillis. “On the other hand, a surprising number of people just don’t want to wait.”

    Some analysts, pointing to years of pent-up demand among Verizon Wireless customers, expect it to sell 9 million to 13 million iPhone 4 units this year.

    Verizon, a venture of Verizon Communications and Vodafone Group Plc, said the phone would be available at 2,000 of its stores. Prices with a two-year agreement for US$199.99 for the 16-gigabyte model or US$299.99 for the 32-gigabyte model — comparable to what AT&T charges.

    Still, there are some provisos to consider: A CDMA iPhone will not allow users to simultaneously support voice and data connections, the same limitation that faced users of the original iPhone connecting to AT&T’s EDGE network.

    Kim Caughey Forrest, senior analyst with Fort Pitt Capital Group, which holds shares in Verizon, said she believes there are many people who have been reluctant to buy an iPhone because of worries about the quality of AT&T’s network.

    As an example she cited her home town of Pittsburgh: “A lot of people in Pittsburgh are really excited about the prospect of having a Verizon iPhone. I don’t believe they are alone. I don’t think we are a unique market,” she said.

    On the other hand, AT&T is expected to face its toughest year since 2004 as a result of the Verizon deal with Apple.

    AT&T, which has come under fire for patchy wireless service in some cities, nonetheless added an estimated 15 million new iPhone customers in 2010. It has tried to reduce its dependence on the iPhone by adding other devices to its service.

    “For iPhone users who want the fastest speeds, the ability to talk and use apps at the same time, and unsurpassed global coverage, the only choice is AT&T,” an AT&T spokesman said following the Verizon announcement.

    One problem for Verizon Wireless may be the high cost of selling Apple products, which come at a premium to other smartphones, analysts said.

    Like AT&T, Verizon Wireless will have to shoulder part of the cost of the devices to convince people to sign long-term contracts.

    Verizon Wireless will have to pay a US$400 subsidy for each iPhone it sells if it keeps the price in line with AT&T’s, UBS analyst John Hodulik estimated.