AT&T's new Mobile Share plan: Who wins and who loses

Wireless subscribers are confused about how AT&T's new data-share plans could benefit them. In this edition of Ask Maggie, CNET's Marguerite Reardon offers some clear examples of who wins and who loses with these plans.

There's no question that AT&T's new Mobile Share plan that allows multiple users to share data with each other and other connected devices is not for everyone.

In this edition of Ask Maggie, I offer some concrete examples of who would benefit from the plan, while also showing examples of families who should steer clear of a share plan. I also offer my opinion on why I think AT&T will never introduce a data rollover plan.

Winners and losers of AT&T's Mobile Share plan

Dear Maggie,

It's disappointing to see AT&T and Verizon adopt these new share plans. Thankfully for now, AT&T is not forcing you into these new plans, because I don't see how they benefit most consumers.

I have a Windows Phone smartphone on AT&T. My wife has a text-messaging phone, and so does my daughter. I have the 2GB data plan for $25 a month. We have a 700-minute voice plan for $70 a month and an unlimited text plan. With any-to-any mobile minutes and nights and weekends, we have more than enough minutes. In fact, we often have rollover minutes. So I don't see how these new plans could benefit us.

We are thinking of getting my daughter an iPhone 4S, but I still don't see how these plans could be cheaper than the plan we already have.

I understand there are other features of the Mobile Share plan that I may use, and there is no limitation on minutes. I also get it that I am on an older promotional plan that actually costs more now, but it still does not make that much difference when you consider that.

So what is my question? Well, it is more of a request that you include some examples to compare the total cost of these new "Data Share" plans with what someone may currently have. And if you could show any examples of who this could benefit, that would be helpful too.

Thanks,
Don

Dear Don,

You are correct that for families who don't use a lot of voice minutes but need more data, these plans are generally not as cost effective as the old plans. But as you point out in your question, the good news is that AT&T is not going to force you into one of these plans. In fact, even new AT&T customers still have the option to subscribe to any of the existing individual or family plans.

As you requested, I have included several tables to show you how the old family plans stack up against the new Mobile Share plans. Below is a table that shows what you are paying now under your existing family plan and what it would cost you if you moved to the Mobile Share plan. As you can see from the table, you'd pay an additional $35 a month if you switched to the new share plan. In your case, it doesn't make sense for you to switch your current plan and usage.

This next table compares how much you'd spend if you added a new smartphone for your daughter to the account. Once again, you can see that you would still pay $15 a month more by switching to the Mobile Share plan. So once again, it makes sense to keep your existing plan and simply add a new data plan for your daughter.

When does AT&T's Mobile Share plan make sense?

There are two instances in which subscribers could pay less under the Mobile Share plan than through an existing family plan.

For example, families who may need a lot of voice minutes and who don't use much data could benefit from these share plans. The table below shows a family of four who has a family plan with 2,100 voice minutes. While it's true that people are talking less on their mobile phones today than they did a year ago, the average cell phone user talked about 638 minutes in 2011, according to PricewaterhouseCoopers. So for a family of four, it's conceivable that a "heavy talking" family could need 2,100 minutes.

Of course, keep in mind that AT&T offers free any-to-any mobile calling and free nights and weekends, so even a family who talks a lot on their cell phones may not need to subscribe to such a high plan. Also, AT&T allows customers to roll over unused voice minutes, so families who don't use all their minutes in one month can use them in the next month. This is another reason why many families may not need to subscribe to a big voice plan. Still, if your family is one that talks a lot, the AT&T Mobile Share plans could be a good fit.

As you can see from the table, families subscribed to the 2,100-minute voice plan would pay $210 per month. They could greatly reduce their monthly cost by moving to the Mobile Share plan, where they could get a comparable plan for $180. And if they are very light data users, they could save another $20 a month by downgrading their data service.

AT&T's share plans can also benefit families who have multiple smartphones and want to add additional services, like the mobile hot spot. And the more data that users sign up for, the less they pay to connect additional smartphones. So at 6GB, the cost to add a smartphone is $35 compared with $45 for 1GB of data or $40 for 4GB of data . The price goes down to $30 if the family goes up to 10GB a month.

In the example below, I show a family of four with four smartphones, one of which has the mobile hot spot feature turned on. This allows users to connect up to five devices, like tablets or laptops, via Wi-Fi so they can use AT&T's 3G or 4G network. Under AT&T's traditional data plans, the carrier charges $20 extra for this service. But it's offered at no additional charge under the Mobile Share plan for every smartphone on the plan.

In the table below, you can see that this family could save $30 a month by moving to a family share plan. But there is one catch. Even though this family may pay less under the Mobile Share plan, they aren't getting the same amount of data that they were allotted under the individual data plans.

As you can see from the table above, this family of four would pay $260 for a total of 14GB of data for three smartphones and one smartphone that can also turn into a hot spot. Under the Mobile Share Plan the same family could pay $230 for a plan that offers them 6GB of data that they can share across all the devices.

If this family wanted to get a data plan with capacity comparable to what they had with the traditional data plan, they could increase their data to a 15GB plan and spend $280 per month. Keep in mind that each smartphone on this share plan would be able to use the Wi-Fi hot spot feature.

Isn't this still a bad deal for subscribers?

AT&T's new share plan is clearly designed to make people pay more for data. There's no question about that. The price per megabyte under these plans is higher than it is under the older plans. But the reality is that most subscribers don't even come close to using all the data that they are already allotted each month.

What this means is that most wireless subscribers are overpaying for the amount of data that they actually use. According to Validas, the average AT&T smartphone subscriber uses between 400MB and 500MB of data per month.

Under AT&T's current data plans, users have the option to subscribe to a plan with 300MB of data for $20 a month, or they can get 3GB for $30 a month. If you believe Validas that the average usage is closer to 400MB or 500MB, then you can assume that most people are already paying for the higher priced 3GB service that costs $30 month. This means that most AT&T smartphone users are not using 2.5GB of data every month. And there is no rollover for unused data.

The share plans allow people to subscribe to a plan that likely better fits their data needs.

Of course, the unsettling thing for consumers is that they don't really know how much data they're actually using. It's difficult to know whether checking Facebook or Tweeting every 10 minutes from your smartphone uses as much data as watching a few videos on YouTube each day.

Even if people know how much data they're using each month, all the experts predict that people will likely use more data in the future as new services are introduced and people spend more time accessing the Net on their mobile devices. As a result, many people want to "safeguard" against unwanted overage charges by buying more data usage than they actually need.

I completely understand this way of thinking. This is why so many people want to hang onto their unlimited data plans, even though they don't really need them. And it also rubs me the wrong way that AT&T, and Verizon for that matter, are charging the same amount or more to offer customers less data. That really stinks.

But for average mobile consumers, these new mobile share plans may actually offer an opportunity to save some money by downgrading the amount of data they're subscribed to in their current plans.

Luckily, AT&T allows you to switch between plans anytime you like. So you could sign up for one plan and track your usage over a couple of months to get a benchmark. And then you could adjust your plan based on what the average usage is.

There are several apps available for both Android and iOS devices that allow you to track your data usage. AT&T offers its own, but there are also lots of third-party apps that can help you get a better handle on your usage.

I use an app from a company called Onavo. It not only gives me an easy breakdown of my total monthly data usage, it also tells me how much each app on my phone is using. And it allows me to set limits so that I get a warning when a particular app is hogging too much data.

The other thing I like about Onavo is that it compresses some of the data that I am using, so that I can also reduce the amount of data I use each month. It doesn't yet compress audio or video, but it can compress data for things like Facebook, Twitter, and e-mail.

The bottom line is that these share plans are certainly not for everyone. Families with fewer devices, who don't need many voice minutes are less likely to get a good deal by switching to the share plan. On the flip side, families who need a lot of voice minutes or who may want to connect multiple devices to their plan could still save money if they "right-size" their data plans and pay only for what they actually need each month.

I hope this explanation was helpful. And good luck!

Will AT&T offer rollover data?

Dear Maggie,

AT&T is famous for their rollover minutes. Do you think AT&T will add that for data?

Thanks,
Remi

Dear Remi,

Unfortunately, I don't think AT&T will ever allow users to roll over unused data as they can do with unused voice minutes. There are several reasons for this.

For one, AT&T has spent billions of dollars upgrading its data network to offer 3G and now 4G services. The company needs to increase revenue to pay for this network. By contrast, the voice network has been in operation for years and the incremental cost of operating and maintaining the voice network is lower. Therefore, the company can afford to give this service away.

What's more, usage on AT&T's data network is increasing, while usage on the voice network is decreasing. AT&T has had a difficult time keeping up with demand for data services on its network. It's one of the reasons why it eliminated its unlimited data service. So it wouldn't make sense for the company to adopt a policy that would encourage customers to use data service.

But the main reason AT&T probably wouldn't offer rollover for data is because it sees data as a way to generate more revenue. As I mentioned above, wireless consumers are actually using voice services less. And they are downgrading their voice plans accordingly.

Meanwhile, data services are in high demand. And AT&T and other carriers are restructuring their plans to charge consumers more on a per megabyte basis than they did before. This will generate higher revenue for the carriers, and ultimately higher profits. Because the price of voice is going down and because usage on that network is also dropping, AT&T can afford to give that service away without losing too much money.

I hope I was able to answer your question. Thanks for writing.

Ask Maggie is an advice column that answers readers' wireless and broadband questions. The column now appears twice a week on CNET offering readers a double dosage of Ask Maggie's advice. If you have a question, I'd love to hear from you. Please send me an e-mail at maggie dot reardon at cbs dot com. And please put "Ask Maggie" in the subject header. You can also follow me on Facebook on my Ask Maggie page.

 

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