AT&T recently announced coming mobile plan updates that strike a balance between rising prices and expanded high-speed data for customers. Effective March 5, 2023, existing subscribers will see a $0.99 per month rate hike. Meanwhile, hotspot data allowances grow moderately across all unlimited tiers to complement primary data.
Below we’ll analyze the key changes through customers’ wallets and data usage needs to evaluate if AT&T strikes the right compromise.
Evaluating the Monthly Cost Increase Impact
While a $0.99 monthly uptick per customer seems minor, at scale across 128 million subscribers this lifts significant revenue for network and 5G buildout initiatives.
Over one year the rate change funnels almost $12 more from each customer. While reasonably absorbable individually, collectively it’s substantial for AT&T’s finances.
Unraveling the Data Cap Adjustments
To cushion the imminent price rise, AT&T boosted mobile hotspot data allotments to provide wiggle room around subscribers’ primary data usage included:
- Basic Tier: 5GB, increased from 3GB
- Mid Tier: 30GB, increased from 15GB
- Top Tier: 60GB, increased from 50GB
By doubling the mid-tier’s data and adding 2-10GB to others, AT&T allows temporary WiFi tethering through your smartphone in more scenarios.
AT&T’s Rationale and Competitive Context
Increasing subscription rates while reluctantly conceding some ground on data caps suggests multiple strategic drivers underlying AT&T’s updates:
- Counter aggressive discounts from T-Mobile and Verizon
- Fund critical network infrastructure and 5G buildout initiatives
- Boost quarterly profitability to satisfy shareholders
Unfortunately consumers fund many such carrier investments via climbing monthly costs over time.
Broader Impacts of Rising Connectivity Costs
Stepping back, the bigger picture around climbing mobile costs remains concerning. AT&T’s hike joins similar recent moves from other major providers in squeezing household budgets.
Collectively this risks access inequality if subsidies, low-income programs, and alternatives don’t expand apace.
Striking the Right Balance for Customers?
While perhaps unavoidable, AT&T’s tradeoff risks goodwill by leaving customers feeling nickel-and-dimed. Network constraints absolutely necessitate revenue investment. However, this perpetually increases the burden on individuals over time.
Beyond temporary hotspot data relief, more creative solutions better serve customers long term.
[Readers: Is AT&T’s tradeoff reasonable in your view, or does the recurring rate hike model need rethinking to sustainably serve mobile customers?]
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