AT&T's New iPhone Data Plans: Pros and Cons

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The discussion continues around AT&T's new tiered data plans for the iPhone, and whether AT&T's decision will significantly impact how new iPhone owners use their device.

If you haven't heard, AT&T will offer new iPhone users a choice of data plans starting Monday, June 7. New users will have to decide between a 200MB plan for $15/month or 2GB for $25. Any data usage above those limits will incur overage charges that have the potential to double your monthly data fees for the iPhone. Current iPhone user can keep their current unlimited plan or switch to a cheaper tiered data plan.

Here are four issues with AT&T's new plans, and a few pros and cons for each.

AT&T's New Data Plan Will Save You Money

Pro: Most users would probably save money under AT&T's new data plan. As AT&T pointed out recently, 200MB of data gives you the capability to send and receive 1000 e-mail messages (no attachments) and 150 e-mails with attachments, view 400 Web pages, post 50 photos on social media sites, and watch 20 minutes of streaming video.

If you also use a Wi-Fi connection for your device when you're at home, work or in range of an AT&T Wi-Fi hotspot (free access for AT&T customers), it gets even easier to survive on 200MB.

The New York Times' David Pogue says that he and his wife typically use 150MB of data per month combined on their iPhones. So AT&T's new data plans could mean big savings for Pogue. "Here I am, a power-using geek, and I could put both phones on the DataPlus plan and save $360 a year," Pogue writes.

Con: But as I pointed out recently, I use on average of 484MB of data a month, meaning I'd need AT&T's 2GB monthly plan. I'd still capitalize on savings, but I could save even more money if AT&T had a middle ground data plan between 200MB and 2GB, say a 500MB offering for $20. But why is there such a big gap between data plans?

To put this in perspective, AT&T's two data plans offer a choice between 200MB or 2048MB (2GB) per month. So for an extra $10 you get more than ten times the data under AT&T's new data scheme. Why such a huge disparity of data levels between the two plans? Is AT&T trying to keep its annual revenue high while simultaneously lowering customer service? Something just doesn't add up.

Most Plans Don't Offer Unlimited Data Anyway

Pro: AT&T is the only network to offer a truly unlimited data plan for the iPhone as most carriers cap their so-called unlimited plans at 5GB of data per month. In fact, AT&T imposes a 5GB cap on its other data plans including its Laptop Connect and Blackberry tethering plans.

The reality is that most users don't need unlimited data. AT&T's new data plans will allow most users to pay less, and bring their monthly billing in line with the amount of 3G data they actually use.

Con: If you're an avid iPhone user who is constantly downloading, tweeting, e-mailing, and streaming video and audio, then 200MB is probably not enough while 2GB is too much. So a good portion of people are saving only $5 per month on their plans, and may still have to keep tabs on how much data they are using.

The beauty of AT&T's unlimited plan was that most users would never have to worry about overage charges even on high usage months. That's not the case under AT&T's new tiered data plans.

AT&T Will Offer Tethering for the iPhone

Pro: AT&T is finally offering tethering a year after the rest of the developed world was offering it.

Con: AT&T's tethering scheme will be difficult to swallow for most users who want to add tethering to their service.

First of all, to get tethering when it launches this summer you have to abandon your unlimited plan on your current device and switch to a tiered data plan. Then, you'll have to pay AT&T's $20 monthly tethering fee, which doesn't even come with any extra data. You are literally paying for the right to tether and nothing more. In other words, AT&T's tethering fee is simply a convenience charge.

Usage Limits Will Kill Innovation

Pro: Some third-party application developers worry that monthly usage limits may make consumers wary of downloading and using applications, according to a report in the Wall Street Journal. Bart Decrem, CEO of Tapulous, told the Journal that AT&T's data plan "could dampen people's appetite for downloading apps and engaging with them over the cellular network."

If people stop freely using applications like they are today, this could force developers to reconsider creating useful and yet data-intensive apps.

Con: There are many ways to download applications including via a Wi-Fi application or your computer at home. It's not like 3G is your only download option. Even if you downloaded the occasional app over your 3G connection, you likely wouldn't have to worry about overage charges on a 2GB plan anyway.

As for interacting with the applications, the biggest concern would be for users of GPS and video streaming apps, and even then 2GB should be enough data for most people. Besides, as that same Journal article points out, restricting data usage could push developers to create apps that use data connectivity more efficiently.

So there you have it four points of view about AT&T's new data plans. What's your take iPhone users? Would AT&T's new data plans force you to rethink your data usage if you gave up your unlimited plan?

Connect with Ian on Twitter (@ianpaul).

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