AT&T (NYSE: T) revived its unlimited data service plan, which will give the carrier's smartphone customers unlimited talking, texting and data for $100 per month for the first line and $40 per month for each additional line -- and the fourth line won't cost anything extra. However, the carrier said the offering is only available to customers of AT&T DirecTV or AT&T U-Verse TV.
"The new AT&T Unlimited Plan is the first of many integrated video and mobility offers the company plans to announce in 2016," the carrier said. "Also, AT&T plans to launch a wide-range of new video entertainment options later this year."
AT&T acquired the DirecTV satellite TV company late last year and is working to merge the business with its existing AT&T U-Verse wired TV service.
To sweeten its new unlimited data offering, AT&T said that existing DirecTV or U-Verse customers who don't subscribe to its wireless service can get $500 if they switch to the AT&T Unlimited Plan with an eligible trade-in, and buy a smartphone on AT&T Next. For those AT&T customers who have the carrier's wireless service but not DirecTV, the carrier said it will offer a TV package beginning at $19.99 per month for 12 months, with a 24 month agreement.
Further, smartphones aren't the only devices AT&T is supporting with its new unlimited plan. The carrier said customers can also add a tablet for $40 per month or a smart watch for $10 a month.
And what of the fine print? AT&T said it "may" slow the data speeds of its unlimited customers after they exceed 22 GB of data usage on a line in a bill cycle, for the remainder of their bill cycle, during periods of "network congestion." The carrier said that other restrictions apply to the offer, which it listed on its website, although that site was not accessible this morning.
"We think the plans may help AT&T return to competitiveness at the high-end of the Wireless market and help the company take back share from Sprint and TMUS; however, we believe there is also a risk to Verizon, whose high-end data offerings now seem even more lackluster when compared to their largest competitor," said the analysts at New Street Research in an analyst note on AT&T's announcement.
The new unlimited data offer by AT&T is noteworthy considering the carrier discontinued offering unlimited data plans to new customers in 2010. The move was largely seen as a reaction to the increasing demands for data among the carrier's growing iPhone customer base -- at that time, AT&T was still the exclusive provider of the iPhone in the United States, and the operator fell under withering criticism that its network was not able to support the growing demand for data among its customers. AT&T replaced its unlimited plans with tiered data usage options geared toward preventing customers from using large amounts of data.
Interestingly, AT&T today may still count up to 6 million customers on its network who still subscribe to its legacy unlimited data plans. The carrier stopped offering unlimited data to new customers in 2010, but existing customers were able to keep their unlimited data plans if they wanted to. The carrier next month will increase the price of its legacy unlimited data plan by $5 per month, to a total of $35 per month.
AT&T's reintroduction of unlimited data leaves Verizon as the only nationwide carrier that doesn't offer an unlimited data option. Both T-Mobile US and Sprint continue to offer unlimited data pricing plans, though both carriers have bumped up the price of those plans in recent months.
"We view this move positively for T as it represents the first tangible offering combining the wireless and video assets it owns," said Wells Fargo analyst Jennifer Fritzsche in a note to investors following AT&T's announcement. "Having 'unlimited' in the title offering is sure to get consumers' attention. At a time when other carriers have backed away from the unlimited data plans, T has stepped forward to help enable its promise of delivering video to any device, anywhere, at any time. We expect it to continue to build on this announcement."
Finally, in its unlimited data announcement today, AT&T appeared to take a veiled jab at its competitor T-Mobile. T-Mobile late last year introduced its Binge On service that provides video streaming from select online video providers at no extra charge to all its customers who subscribe to its 3 GB or higher data plans. However, T-Mobile has been criticized for slowing the streaming data speeds of all of the video on its network.
"We've got the content consumers want, we're delivering it to the devices they want, and we're making it as easy as ever for them to consume as much as they want," Ralph de la Vega, CEO of AT&T Mobile and Business Solutions, said in the carrier's press release. "And, they will get a high-quality video streaming experience from the start. No compromises in video quality."
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Article updated Jan. 11 with analyst commentary.