AT&T undercuts Verizon with $65 prepaid smartphone plan

AT&T Fusion 2 Huawei GoPhone

Fusion 2

AT&T Mobility (NYSE:T) is introducing a new $65 prepaid plan with unlimited voice, texting and 1 GB of data, undercutting rival Verizon Wireless (NYSE:VZ) and bringing its pricing closer to more traditional no-contract offerings.

The new $65 AT&T GoPhone plan will go into effect Oct. 7 and also includes unlimited text messaging to Mexico, Canada and over 100 other countries. AT&T's previous prepaid plan offering unlimited voice, texting and 1 GB of data cost $75. 

AT&T said it will continue to offer its $50 monthly GoPhone plan with unlimited voice and texting and its $25 monthly plan with 250 voice minutes and unlimited texting, each with optional data packages. As an add-on to its prepaid smartphone plans, AT&T charges $25 for 1 GB, $15 for 200 MB and $5 for 50 MB.

With the change in pricing, AT&T is undercutting the price of Verizon's similar plan by $15. Verizon's $80 prepaid smartphone plan, introduced May 1, also includes unlimited voice, texting and 1 GB of data. In August Verizon greatly expanded the number of smartphone that are eligible for the plan to include numerous Motorola Mobility Android phones as well as ones from Research In Motion (NASDAQ:RIMM), Nokia (NYSE:NOK) and Palm.

AT&T also introduced the Huawei-made Fusion 2 Android smartphone as a new GoPhone product. The device offers a 3.5-inch screen, Android 2.3 Gingerbread, an 800 MHz processor, 3.2-megapixel camera, 512 MB of RAM and 2 GB of internal storage.

Both AT&T and Verizon's prepaid plans sit at the high end of the prepaid market in terms of pricing. For example, MetroPCS (NYSE:PCS) is offering a promotional $55 LTE smartphone plan, which bundles unlimited voice, text and data. Cricket provider Leap Wireless (NASDAQ:LEAP) offers a plan that includes unlimited voice, texting and 1 GB of full-speed 3G data for $50 per month, an offering that comes with unlimited Muve Music access. Sprint Nextel's (NYSE:S) Virgin Mobile brand offers unlimited voice, texting and data (including access to Clearwire's (NASDAQ:CLWR) mobile WiMAX network) for $55 per month.

For more:
- see this release
- see this Engadget post
- see this Phone Scoop post

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