AT&T goes on the offensive with cheaper family plans

The new plans offer more savings with more people, with a family of four paying $160 month for 10 gigabytes of data.

An AT&T store in Manhattan. Marguerite Reardon/CNET

AT&T is showing it can get aggressive with pricing too.

The Dallas-based telecommunications company unveiled a new series of family plans designed to entice new users and keep existing ones on its service. The savings -- which come only to customers who sign up for monthly installment program Next; bring their own device; or purchase it outright -- escalate as more members join in. The plan launches Sunday.

It's likely the latest sign of the competitive pressures on AT&T. The fourth quarter has seen both AT&T and Verizon post slowing growth as T-Mobile released customer growth numbers that were a dramatic turnaround from a year ago. More recently, T-Mobile has targeted its rivals' family plan customers, offering to buy out their early termination fees. Sprint is pushing its "Framily plan," with which it hopes to rope family and friends together.

AT&T, meanwhile, has been steadily responding, offering up a number of incentives to switch. The company dismissed the notion that this is in response to a single competitor. And its press release calls out Verizon Wireless, not T-Mobile.

"We think it will be attractive to customers from other companies," said an AT&T representative.

The break comes from fees that AT&T charges for each line. Before, customers would pay $100 for 10 gigabytes of data and unlimited voice and text messages, and then pay an additional fee to add smartphones. A contract customer, who received a subsidized phone, would pay $40 a month, while an off-contract or Next customer would pay $25.

AT&T is reducing the cost to add a new line to $15. For two people, that amounts to $130, while a family of four would pay $160. If a customers are on Next, however, they would also pay the monthly device fee, which ranges in price but would be around $20 for a typical high-end smartphone, negating some of the savings.

If you're walking into an AT&T store with your own phone, the savings are significant. A comparable plan for four at Big Red costs $260 a month. The savings gap narrows a bit if a person has to pay the device fee, which could amount to $80 a month for four smartphones.

The plan, however, is still more expensive than T-Mobile's. A comparable plan for four people and 2.5GB of high-speed data would cost $140, or $20 less than AT&T. As with AT&T's new plans, T-Mobile customers must also shoulder the cost of the phone.

The new plans come on the heels of AT&T's offer to give a $100 bill credit for each new line of service added, whether it's a phone, tablet, or mobile hot spot.

While AT&T is focused on the 10GB plan, which the representative called "the sweet spot in terms of what families are likely looking for," the new savings also apply to the higher data tiers as well.

About the author

Roger Cheng is the executive editor in charge of breaking news for CNET News. Prior to this, he was on the telecommunications beat and wrote for Dow Jones Newswires and The Wall Street Journal for nearly a decade. He's a devoted Trojan alum and Los Angeles Lakers fan.

 

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