U.S. mobile operator AT&T has launched a suite of plans called Mobile Share Value, with prices for data, voice and texts reduced (for most packages) compared to the company’s previous equivalent plans. Mobile Share plans allow consumers to connect up to 10 devices and business customers to connect as many as 25 devices. AT&T is also dropping monthly fees by $15 per smartphone if the user brings his or her own phone rather than purchasing a subsidized phone or else purchases a phone through AT&T Next, a zero-down financing option. For example, a plan with two smartphones, 1 GB of data and unlimited calls and texts formerly cost $130 per month and now costs $125 with subsidized devices. With no subsidies, it costs $95. A 300 MB plan with one smartphone formerly cost $70 per month and now costs $60, or $45 with an unsubsidized phone.
AT&T has been seeing attrition in the ranks of its customers, some of whom have been lured away by the much lower prices offered by the increasing number of MVNOs coming on the U.S. market. While those who want the reliable speed and large footprint of a major national player will likely not migrate to an MVNO, AT&T appears to want to shore up customer satisfaction levels, and lowering monthly fees on a wide range of offerings is a time-tested means of doing so. What is new, however, is the concept of non-subsidized-phone savings, and we find them particularly noteworthy in that they acknowledge the fact—as U.S. providers typically have not up to this point—that after the initial payment for a subsidized device is made, the balance of the price is spread out over the course of the contract. Those customers who want multiple-device plans are very likely to possess devices from already-expired AT&T plans or possibly to have brought them over from other operators. By offering a $15-per-month reduction for these devices (as well as those bought through AT&T Next, which have their own monthly payments), AT&T is not only saving the customer from paying monthly amortizations for devices that do not need subsidizing, but is also fostering goodwill by apprising these customers of the fact that monthly fees have the cost of the phone factored into them—a fact of which many are unaware. We think this transparency about device pricing is a very good development.