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Thursday, May 21, 2009, 08:55 pm

AT&T considering lower-cost, capped data for iPhone, others

By Katie Marsal

Hoping to spur take up of smartphones at a time when subscribers are very sensitive to price, AT&T has signaled that it's willing to give these devices, including the iPhone, lower data rates in exchange for limits on usage.

The carrier's wireless chief, Ralph de la Vega, remarked this week at the Reuters Global Technology Summit that he could see AT&T setting a cap on the amount of data used in a given month in return for a lower fee. One example, though not necessarily what AT&T would use, is the company's netbook strategy: while the mini notebooks still have access to the usual 5GB monthly data plan, subscribers can pay $20 less per month if they're willing to put the cap at 200MB before overage fees kick in.

iPhones were mentioned by the executive as possibly affected by any switch in strategy but that it wasn't Apple's device alone that would prompt demand. Instead, smartphone adoption in a difficult climate was the important concern.

"Right now we continue to study what is the best thing that is available, not just from an iPhone point of view, but what you can do to stimulate additional demand," de la Vega said.

The news echoes rumors that, among other things, AT&T may offer a $20 iPhone data plan that would save customers $10 a month but put a ceiling on data access.

De la Vega ruled out simply cutting the price without restrictions on Internet use, however. AT&T recently declared itself the leader in smartphones and has steadily become more reliant on data as a source of income. The provider's goal is to make money on services, he said, and with the iPhone's price already being heavily subsidized, dropping the price would only hurt AT&T's bottom line.

Such a strategy would be unique in the United States but isn't uncharacteristic of carriers in other nations such as Belgium or Canada, where more bandwidth is used as a lure to step up to more expensive plans.
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