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AT&T cuts price for shared data plans for small businesses and families

Matt Hamblen | Feb. 4, 2014
While Verizon might be expected to react in kind, it argues price is just one factor in keeping customers in the US.

A survey conducted by Computerworld of 820 wireless users last year found that a carrier's network coverage is the most important factor in why people choose a mobile provider, followed by price.

Menezes said the survey mirrors what he hears from large business clients. "Price is important, but nothing sends them fleeing from a carrier faster than poor or inconsistent connectivity, especially when it's voice [problems]," he said.

Corporate customers that spend more than $200,000 a year with either AT&T or Verizon typically pay substantially less than consumers for mobile data. If a single consumer pays $20 per gigabyte a month with a shared plan like the one AT&T just announced, a single worker at a large corporation might typically pay $8 or less per gigabyte, Menezes said. Still, the downward pricing pressure affecting consumers could matter to corporate pricing trends, analysts said.

Price cuts don't typically help investors, but could have their biggest impact on customers, mainly in keeping them with the same carrier. Price cuts "would seem to have a bigger impact on customer retention than on increased market share for the bigger carriers," Menezes concluded.

Jack Gold, an analyst at J. Gold Associates, offered a different view. "Customer loyalty only gets you so far, and most carriers don't have a very loyal following," he said. "AT&T's move is both a reaction to T-Mo's aggressive pricing while also trying to further poke a finger in Verizon's eye. Verizon will eventually have to react to all of these pricing moves just to remain competitive."

 

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