Which companies will benefit from AT&T's new throttling policy?

Companies that optimize data traffic and wireless carriers such as Sprint Nextel (NYSE:S) that still offer unlimited, unthrottled smartphone data plans may be among the chief beneficiaries of AT&T Mobility's (NYSE:T) newly defined data-throttling policy.

AT&T said late last week that it will now throttle HSPA users after 3 GB of usage and LTE users after 5 GB of usage, and subscribers' speeds will remain slowed throughout the rest of their monthly billing cycle. The carrier will alert subscribers of the change with a text message the first time it slows their speeds, but it won't send another alert if it happens again. AT&T previously throttled the 5 percent of its customers who used the most data in a specific location, but that method generated an outcry among users who weren't prepared to have their speeds reduced--and, in some cases, users who had only consumed 2 GB of data. AT&T still has 17 million customers on legacy unlimited data plans.

The changed policy could give an opening to companies such Onavo Mobile, which makes an iOS and Android application that compresses downloads, allowing customers to use less data. "The reality is, the only sustainable model for the mobile Internet is where there's a price tag," Onavo CEO Guy Rosen told Bloomberg. "The supply is limited. Within this reality, there's a dire need for transparency and control, and for consumers to squeeze as much as they can."

AT&T's policy could also be a boon to Wi-Fi offloading firms, as well as other optimization firms, including the likes of Bytemobile, Openwave, Ortiva Wireless, Radware, Radisys and Vantrix. However, one of the biggest beneficiaries could be Sprint, alone among the Tier 1 carriers in offering unlimited, unthrottled smartphone data. "It may, on the margin, hurt them a little bit," Stifel Nicolaus analyst Christopher King said of AT&T. Sprint continues to heavily market its unlimited data plans, especially in its advertisements for Apple's (NASDAQ:AAPL) iPhone.

Still, AT&T's postpaid churn of 1.21 percent in the fourth quarter was quite low by most industry standards, and up from 1.15 percent in the third quarter and year-ago period. AT&T began throttling the top 5 percent of data users in October. "Sprint's message of unlimited will resonate a little better now there's all this negative publicity around AT&T," Bernstein analyst Craig Moffett told Reuters. "But the fact customers haven't left (AT&T) yet tells you these relationships are stickier than people think."

For more:
- see this Bloomberg article
- see this Reuters article

Related Articles:
AT&T revises throttling policy after user uproar
Data throttling debate heats up following new study results
Data throttling: Annoying but effective
Allot: 48% of operators throttle data in unlimited plans
Virgin Mobile will throttle heavy data users
Verizon begins limiting bandwidth of heavy 3G smartphone data users

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