By Kelli B. Grant
New AT&T customers don’t need to worry about monitoring their number of texts to avoid overage — starting Sunday, an unlimited plan is effectively their only choice. That could add $120 a year to the bills of some consumers.
Engadget reported late Wednesday that effective August 21, AT&T would “retire” its $10, 1,000-message plan for new subscribers. Mark Siegel, a spokesman for AT&T, confirmed the changes to Pay Dirt. “It’s part of an ongoing review of plans,” he says. The change leaves users two options: pay a la carte at rates of 20 cents per text and 30 cents per picture or video message, or spend $20 per month on an unlimited messaging plan. (Consumers on a family plan can still pay $30 for unlimited messaging on up to five lines.)
AT&T says the “vast majority” of its customers had already made the move to unlimited. But the switch effectively doubles the bill of new users who would previously have been fine with the $10, 1,000-message bucket, adding $120 over the course of a year. Those customers and other infrequent texters with smartphones may be better off looking at free instant messaging apps that use your data plan, to avoid a texting bill altogether.
Customers can sign up for the “Messaging 1000” plan until Sunday, and those who do have it get to hang on to it. “If you’re a current customer and you have that and you want to keep it, no problem,” Siegel says. There’s no time limit on that grandfathering — consumers can keep the plan even when they renew contracts or switch handsets. But once you switch out of that plan, there’s no switching back in.
AT&T’s move makes sense from a business standpoint because most new phone activations are smartphones, which means heavier texting and data use, says Todd Day, an industry analyst for Frost & Sullivan. He expects the other carriers to follow suit, which could benefit consumers in the long-run as texting morphs into a free-add on to talk plans. “Once all the carriers only have unlimited messaging, then the competition becomes, what are you going to charge?” Day says.
Consumers should be more worried about the wireless industry’s moves to eliminate unlimited data plans and slow connection speeds for big users, says Delly Tamer, chief executive for wireless retailer LetsTalk.com. “Texting is nowhere near as important to customers as data costs,” he says. Carriers’ move toward usage-based data pricing could add $15 to $30 to your monthly bill in the short term, and maybe more.