With the debut of "mMode," the carrier is offering games, messaging services and other features on a customer's mobile phone--all for an additional monthly fee. To use the, customers will have to buy one of four phones, which range in price from $79 to $200.
mMode, the U.S. version of the wildly popular i-mode offered by Japanese carrier DoCoMo, is among the first attempts by U.S. carriers to sell more than just faster wireless Internet access over their. The success or failure of mMode could shape what other carriers offer to their customers. Sprint PCS, for example, plans to launch a higher-speed phone network in early summer.
So far, U.S. consumers have not been using their phones for more than voice services. In Europe, however, there are an estimated 30 billion e-mails exchanged every month between cell phone users. Only about 1.5 billion messages will be exchanged in the United States this year, according to industry forecasts.
Alan Reiter, a wireless analyst with consultancy Wireless Internet & Mobile Computing, was skeptical that the service could dramatically push that U.S. number higher.
"There are no magic bullets," he said.
Keith Waryas, an analyst with research firm IDC, said he believes customers might have a tough time swallowing AT&T Wireless' billing practices for the mMode service.
The company is charging by the number of kilobytes downloaded. mMode customers, for instance, can buy 2MB of data a month for $12.49. AT&T Wireless then tallies up the data a person uses every 24 hours, rounding up to the nearest kilobyte. Most carriers either have or intend to adopt this method when they launch their new networks.
"During a 30-day billing cycle, they are rounding up 30 times," Waryas said. "People might get a little (perturbed) at all the data they are losing."
But AT&T maintained that the method is pretty standard in the industry.
"If you look at how most carriers round up voice minutes, I don't think it's atypical," said Andrew Willett, AT&T Wireless' vice president for data services. "For the amount of data people will use, I just don't think it'll make a dramatic difference. I don't think it'll be a big issue for us."
The service is available in two dozen cities where AT&T Wireless has finished building its new telephone networks using equipment based on the GPRS (General Packet Radio Service) standard. AT&T Wireless intends to create a nationwide GPRS network by year's end. A similar service offered in Japan has 28 million subscribers.