No More Unlimited Data Plans on AT&T

As of today, AT&T is no longer offering unlimited data plans of any kind. Unless you are grandfathered in, you are now subject to monthly data limits of 200 MB or 2 GB, depending on which plan you go with. What does this mean for the future of the iPhone, with the new iPhone on its way? And what kind of impact will this have on the rest of the industry?

The reason for the policy change is obviously to stop the growth of data usage over an already clogged network. AT&T’s overextended 3G network has become the butt of jokes and the source of frustration for iPhone users everywhere. And with the recent release of the iPad, and the upcoming new iPhone (which is rumored to have both a front facing camera and video chat), the network itself simple cannot handle any more additional traffic.

AT&T claims that only 2% of its current users currently exceed 2GB data usage per month, but that stat is a bit skewed. Sure, only 2% may consistently exceed 2GB per month, but I would bet that most of their users have exceeded 2GB at one point or another - especially during the honeymoon period of owning a new iPhone when we download and try out every app possible. To be fair to AT&T, they only charge $10 per GB for overages, which is much more reasonable that the $1.99 per MB that Verizon charges.

In the end, while I hate seeing AT&T put in restrictions like this, I understand why they did it. For the carrier to survive, they cannot handle any more data traffic. In the end, this will probably not have a huge impact on AT&T. Even though the $25 2GB plan is $5 less than the previous unlimited plan, the occasional extra $10 or $20 overage charge will likely even out any savings. The bigger impact will be on the future of mobile apps on the iPhone platform. Data rich applications, such as Major League Baseball’s streaming games, will no longer be viable on AT&T’s network. If other networks follow AT&T’s suit and restrict their data plans, mobile applications in general will undergo a paradigm shift to become more processor intensive and less data reliant. Whether or not this is a good thing would have to be seen.

However, if the other major carriers keep their unlimited data plans (as I expect them to), and focus on upgrading infrastructure to handle the increased traffic, AT&T will be forced to do the same, or be regulated to the ranks of the minor carriers.