If you want an iPhone but are turned off by the high monthly service fees, some good news may be on the horizon. According to BusinessWeek, AT&T Wireless may offer lower-priced plans as early as late May. If the report is true, the starter iPhone plan would cost about $60 a month (plus taxes), a $10 reduction off the current low-end price.
This rumor has been floating around for about two weeks. Early this month analyst Michael Cote of Cote Collaborative Wireless Strategy told TheStreet.com there's a "strong possibility" AT&T would lower its rates as a tie-in with Apple's new iPhone model, which is rumored to arrive in June. As expected, Apple and AT&T declined to comment.
While Apple -- and particularly iPhone -- rumors are a dime a dozen, this one may have merit. For AT&T, a cheaper entry-level service plan could pull in on-the-fence buyers who love the iPhone but not the monthly fees that come with it. A $10 discount may not seem like much, but it could attract new subscribers, particularly if combined with a cheaper iPhone that's priced less than today's $199 iPhone 3G.
Lower-cost plans could also help AT&T ward off competition from Verizon Wireless, which is reportedly in talks with Apple to bring the iPhone to its current CDMA or upcoming LTE network. AT&T wants to remain the exclusive U.S. iPhone provider until 2011, and for good reason: Apple's blockbuster smart phone helped AT&T sign up 4.3 million iPhone subscribers last year, 40 percent of whom were new to AT&T.
Cheaper iPhone plans could also draw attention away from the upcoming Palm Pre, a feature-packed smart phone that should launch by mid-June, if not sooner. And they could make AT&T appear more competitive versus bargain wireless providers that offer all-you-can-eat plans for $50 or less.
For consumers, even those who don't want an iPhone, lower monthly fees would be great news. Competing wireless providers would feel the pressure to match or top AT&T's prices, and (hopefully) we'd all pay a bit less for wireless service.
It's unclear, however, exactly what limitations a $60 iPhone plan would bring. Would the bandwidth caps be too low for most users? Would AT&T nickel-and-dime these customers with overage fees? We shall see.