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AT&T hikes up data plan prices

AT&T nudged up its data plan prices this week. Here's what you need to know. 

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Reuters
AT&T is raising its data rates this week. The reason? High data usage among users of handsets such as the iPhone 4S. Here, an iPhone 4S advertisement in China.
  • By Matthew Shaer

AT&T announced this week that it would raise the prices on data plans for tablet computers and smartphones, while increasing the amount of data users can download. 

The carrier currently offers three tiered smartphone plans: 200 MB for $15 a month, 2 GB for $25 a month, and 4 GB for $45. Beginning on Sunday, new users will be forced to pick from one of the following new options: $20 for 300 MB, $30 for 3 GB, and $50 for 5 GB. So, yes, you'll be getting more data, but you'll also be paying a larger price. Good news for power users – bad news for casual owners.

Meanwhile, tablet data plans will now run at two price points: $30 for 3 GB and $50 for 5 GB. 

Importantly, current AT&T consumers won't see their data plans change. 

So what's behind the rate hike?

Increased usage, according to AT&T. 

"More content downloading, more video streaming, more apps. Connecting with family and friends 24-7. Mobile broadband has become part of our daily lives –and data usage has skyrocketed," AT&T exec Mark Collins wrote on the AT&T blog. "And as the AT&T network gets even faster with 4G LTE deployment – up to 10 times faster than 3G – and devices and applications become even more sophisticated, it’s clear that data usage will surge even more."

Indeed, as analyst Jack Gold told Computerworld today, there's little reason to doubt that AT&T will again hike rates. "AT&T can charge higher prices because consumer demand is there, and there really is very little price pressure," Gold said. "I don't think this will be the last increase consumers see."

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