AT&T Announces Mobile Hotspot, Expands Tethering

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AT&T is gearing up for a fight with the impending end of its iPhone exclusivity, and the launch of the Verizon iPhone. No longer able to rest idly on the fact that it is the only iPhone game in town, AT&T will have to be more aggressive about competing with rival wireless carriers in other ways. With that in mind, AT&T is embracing the Wi-Fi hotspot concept and expanding its data tethering program.

While there are rumors that the upcoming iOS 4.3 update will add Wi-Fi hotspot functionality to the iPhone, the iPhone is not the smartphone AT&T is introducing the Mobile Hotspot app. According to a press release from AT&T, "The feature will first be available February 13, beginning with the in-store launch of the HTC Inspire 4G. Bundled with the AT&T Data Pro plan, customers will benefit from a total of 4GB for $45 per month."

The new Mobile Hotspot feature combines 2GB of data usage for $20 per month, with the 2GB AT&T Data Pro plan for $25 per month for a total of 4GB of data to be shared collectively across all connected devices. An overage fee of $10 per GB will be incurred if users exceed the allotted bandwidth.

Asked about the expected hotspot capabilities of iOS 4.3 and how that fits with the new Mobile Hotspot app, an AT&T spokesperson responded simply, "We are working with Apple to bring it to iPhone."

To keep things fair and add value for its other data-sharing customers, AT&T is also tacking the same 2GB of data consumption onto the existing tethering plan. Currently, AT&T charges $20 per month for the privilege of tethering, but doesn't provide any additional data capacity. As of February 13, users will have 2GB of data on their smartphone, and an additional 2GB for the data tethering.

The moves show that AT&T is willing to compete more aggressively, and might even help ease some frustration by users who feel that AT&T is intentionally exaggerating data usage. However, AT&T's wireless rivals still make a compelling case with their data plans as well.

Verizon will offer iPhone 4 customers an unlimited data plan for $30 a month--the same plan which AT&T used to offer, but killed in favor of the tiered data plans it offers now (although some users are apparently still able to get the unlimited data plan back). Verizon will also offer a $20 tethering option for the iPhone 4 which includes an additional 2GB of data usage.

So, Verizon is providing unlimited data plus tethering for $50, while AT&T is offering 4GB of data including tethering for $45. At face value that seems to be a win for Verizon, but there is a key difference. The 4GB of AT&T data is shared across all connected devices, while with Verizon the unlimited data is only on the iPhone and the tethered devices are limited to the 2GB.

I'm still waiting for the wireless providers to pool data bandwidth for group or family plans the way they do with calling minutes or text messaging--and for AT&T to offer "rollover megabytes". I'm tired of having to pay separately for data on each device and manage the usage and data caps of each.

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