AT&T new data pricing risks defections

With AT&T having announced its plans to make its new data pricing effective from Sunday, January 22, there are speculations galore that the move may risk defections for the carrier.

AT&T's new data plans - which will have the new subscribers paying approximately 33 percent more for the monthly data plans - are apparently a part of the carrier's strategy to manage annual wireless data growth of around 40 percent as well as benefit from the demand for data-starving devices such as the Apple iPhone.

The new data plan tier that AT&T is making effective from Sunday will essentially have the new subscribers shell out an additional charge of $5 per month, while also getting the advantage of receiving more data. At the lowest tier, the cost of the data plans will increase from $15 for 200MB of data to $20 for 300 MB.

Despite the fact that AT&T has been defending the forthcoming move with the argument that the data-plan pricing changes would offer more monthly data to customers at a lower cost per GB, the move does carry the potential risk of loss of customers to rival carriers.

According to Macquarie Securities analyst Kevin Smithen, it is highly likely that the increased costs of AT&T's data plans may lead to defections, prompting the subscribers to shift, at least in the short term - to competing carriers, like Sprint Nextel which offers unlimited plans or even to T-Mobile USA.