WiFi more pertinent for AT&T now that unlimited smartphone data plans are gone

Reactions ranging from praise to disgust have emerged following AT&T's (NYSE:T) major revamp of its smartphone data plans. In short, unlimited data pricing is a thing of the past on all smartphones and the Apple iPad.

The new pricing plans, which go into effect June 7, give subscribers an option to purchase 200 MB of data for $15 per month or 2 GB of data for $25 instead of purchasing one unlimited $30 plan per month. iPad users no longer have an unlimited data option either. New users must pay the $25 for 2 GB of data. Tethering is also available to the 2GB smartphone subscriber for another $20 per month. (see the story below)

I see the rationale. AT&T wants to drive the penetration of data services--the growth driver of the industry--while monetizing customer usage without the risk of network abusers. By making the move now, it can further drive metered pricing into the future with HSPA+ and LTE.

While there are many elements of AT&T's move to discuss, debate and complain about, one of the more subtle and interesting issues to me is the fact that these new metered usage plans now encourage heavier use of WiFi. One of the troubles surrounding offloading to WiFi has to do with the fact that subscribers really haven't had an incentive to do so given the fact that smartphone plans have come with unlimited data connectivity. Granted, many of AT&T's smartphones, including the iPhone, feature auto-authentication, but that can easily be disabled. In its press release, AT&T pretty prominently reminds customers that each plan includes unlimited access at no additional charge to more than 20,000 AT&T WiFi hotspots in the U.S.

The new pricing plans also dovetail with AT&T's announcement last week that it has set up a giant WiFi hotzone in New York City's Times Square that will provide its mobile broadband customers free access. AT&T called the new WiFi coverage zone a pilot deployment that will be used to explore the use of WiFi to provide an additional broadband option in areas with consistently high 3G traffic and mobile data use. Depending on the results from this pilot, AT&T said it may deploy additional hotzones in other areas across the country. It will be interesting to see what type of usage AT&T will get once a significant number of smartphone users are on these new plans.

I have a feeling AT&T may very well expand this hotzone concept in a big way.--Lynnette