Pros and cons of AT&T’s new iPhone & iPad data plans

Today AT&T announced new data plans for smartphone & tablet devices – including the iPhone & iPad – that are causing quite the stir. While parts of the new plans are indeed better for customers, others are a complete & utter disaster.

About a year ago I was one of the few people who defended AT&T when they were getting trashed by the media and tech communities. Now, with the mobile carrier’s newly announced data plans, we are in a similar situation and I’m not so sure I can put my full support behind them again. I like some of what they’ve done, but there are major flaws in AT&T’s new strategy that are overshadowing the positive aspects.

To summarize, AT&T announced a tiered 3G data structure for all smartphones on their network effective June 7th – the same day the next iPhone will be introduced at WWDC. Customers can choose from a 200MB plan for $15/month or a 2GB plan for $25/month. Any overages past 2GB will be charged at $10 per GB. In addition, AT&T is at long last going to support internet tethering on the iPhone for $20/month, which allows users to share the phone’s data allowance with another device like a laptop. Finally, the iPad’s $30 unlimited data plan is being phased out for a $25 2GB plan to match the iPhone’s, with the same $10/GB overages fee.

The good stuff

While most people are only focusing on the negative parts of AT&T revised data plans (as we will in a moment, too), let’s not ignore the positives. People who want an iPhone but didn’t want to pay $70/month ($40 voice + $30 unlimited data) can now pay $55/month with the 200MB data plan for $15. AT&T says 65% of their customers would fit within this plan and I believe them since most people consume a majority of their data over WiFi rather than 3G.

Even people who will use more than 200MB of data per month will get a price cut. Their 2GB plan for $25 is cheaper than what we pay now, albeit for limited data. But AT&T says 98% of their customers stay under 2GB – again, a figure I believe. Using up 2GB on a phone is very difficult to do. I encourage iPhone users to take a look at their monthly data usage on AT&T’s website (look for “View Past Data Usage” once you log in). You’ll probably be shocked at how low the number is. I thought I was using a good chunk of data every month and it turns out I only average between 150MB-350MB on my iPhone 3GS.

Yes, “unlimited” has a nice ring to it. People love to feel like they’re free to do whatever they want. In reality, though, the $5 savings every month is nice and 2GB is sufficient for almost everyone. Unless, of course, you’re tethering another device to your phone. Which brings us to the disasters…

The bad stuff

Officially supporting tethering is something AT&T should’ve done a long time ago. But regardless of the time frame, their implementation now that it’s here is a major ripoff. Why are customers being charged $20 for the privilege of sharing their iPhone’s limited data plan? If we’re paying $25 for a fixed amount of data (2GB), it shouldn’t matter whether that’s being used by the phone or a laptop.

If they had kept the $30 unlimited data plan, I would understand charging $20 or even $30 for tethering because a laptop plows through a lot more data than a phone ever could. At the very least, AT&T should up the 2GB limit to 4GB or 5GB when $20 extra is being charged for tethering. Otherwise it’s just an artificial tax for taking advantage of what we’re already paying for.

Even worse is AT&T’s downgrading of the iPad’s breakthrough $30 unlimited data plan. The 3G iPad is barely a month old and AT&T is already pulling the ol’ bait and switch move. Unlike a smartphone where it is uncommon for users to consume over 2GB of data in a month, the iPad is more of a computer and multimedia device. Its more robust web surfing and video streaming experiences likely result in a lot more than 2GB of data usage. AT&T is crippling the usefulness of a revolutionary new device that is just begging to be used on-the-go. And to do it so soon after the iPad’s release is a bit confusing. This obviously wasn’t planned very well.

So, what do you think about AT&T’s new data plans for smartphones & tablets? AT&T stated that current iPhone & iPad customers will be able to keep their $30 unlimited data plans if they want, even if they upgrade to a new model. But choosing the new plan is required for activating (ridiculously-priced) tethering capabilities. Choices, choices…