Dawson: Thorny Issue of Devise Subsidy Still on Table

Dawson reacts to today's announcement from AT&T of the launch of shared data plans for mobile services in late August, joining Verizon Wireless, which launched its plans in late June.
Jan Dawson, chief telecoms analyst at Ovum,  says that AT&T’s newly launched shared data plans show it has learned from Verizon’s mistakes, but some issues remain.
“As more and more consumers use multiple devices with mobile connectivity, there is increasing demand for shared data plans. We often talk about first mover advantage in this market, and Verizon had an opportunity to benefit from it when it launched. But it made several key missteps and turned what should have been a good news story into a bad news story, leaving the door open for AT&T and other carriers to provide a more compelling offering. AT&T seems to have learned from Verizon’s mistakes and is giving customers more options and a simpler charging structure.
“AT&T’s offering has almost identical pricing but some really important differences in the detail. Most importantly, AT&T isn’t forcing customers into the new plans, which is really important because they’re not the best deal for all customers. In addition, AT&T’s overage charges for data are much simpler, at a flat $15 per Gigabyte, compared with Verizon’s confusing two-tier overage charges. There are some subtle differences in the pricing, too, but they won’t make a significant difference to most customers.
“What neither Verizon or AT&T’s plans do, though, is deal with the thorny issue of device subsidies. Verizon’s launch highlighted the confusion that exists about the role of subsidies in the minds of consumers, and nothing in AT&T’s launch will alleviate that. We still need a fundamental change in the way carriers talk to consumers about device subsidies in order to educate them on the true cost of devices and service plans, but we’re not getting that with this launch.”
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