AT&T Revives Unlimited Data Plan, Despite Surge in Video

AT&T is bringing back its unlimited wireless data plan, but only for those customers who subscribe to its U-verse home television service or to DirecTV, the satellite TV service it recently acquired. For the past five years, AT&T has been moving customers into plans that charge for data use. The recent switch, most likely in response to competition among carriers eager to sign up new customers and retain existing ones, comes at a time when customers are gobbling up data watching YouTube and Netflix videos on mobile devices.

The Wall Street Journal reports Cisco Systems’ finding that the average North American smartphone owner used about 3.2 gigabytes of data a month in 2015, a leap from less than 1 gigabyte a month in 2010.

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In an argument against unlimited data plans, AT&T and Verizon took the position that increasing data traffic requires network upgrades that are unaffordable with less profitable unlimited data plans. For that reason, in 2010 AT&T became the first major U.S. carrier to stop offering unlimited plans to new customers, followed by Verizon in 2011. Sprint and T-Mobile continued to offer these plans.

The AT&T plan includes unlimited data, voice calls and texting for $100 a month, with additional lines $40 a month and $40 to add a tablet with unlimited data.

“The biggest risk will be whether the network can handle the resulting lift in usage,” said BTIG analyst Walter Piecyk. However, New Street Research analyst Jonathan Chaplin described AT&T’s move as “savvy.”

“With increased competition on unlimited data, the move is certainly a negative for Sprint and T-Mobile,” he said.

AT&T explains it is able to offer the unlimited data plan because it has made “significant network investments.” Also, the telecom’s $49 billion acquisition of DirecTV now enables it to offer product bundles that make it more competitive. AT&T estimates more than 40 million potential wireless customers live in homes with DirecTV but don’t have AT&T service.

In November, however, T-Mobile started offering a service that doesn’t charge for (lower-quality) data used to stream Netflix, Hulu and HBO, among other content providers. AT&T says its move back to unlimited data was not in response to the T-Mobile offer. The new AT&T plan, says a spokesperson, is only for a “limited time.” But AT&T hasn’t set an end date; customers will be able to keep the plan after AT&T stops offering it.