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Telecom & Wireless

AT&T Considering Data-only Subscriber Plan (T, VZ, VOD, MSFT, S, AAPL, LEAP, FB)

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By Paul Ausick Published
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At an investor conference today, the CEO of AT&T Inc. (NYSE: T) said that data-only subscription plans for wireless networks are “inevitable” as wireless revenues shift more heavily to data rather than voice transmission. Just a couple of weeks ago, Verizon Wireless, a joint venture of Verizon Communications Inc. (NYSE: VZ) and Vodafone Group plc (NASDAQ: VOD), said it was working on a data plan that would allow a single subscriber to use the plan for more than one device. There are big changes afoot in the wireless business.

Data-only plans would force subscribers to use some kind of voice-over-IP plan such as Skype from Microsoft Corp. (NASDAQ: MSFT). Microsoft paid $8.5 billion for Skype earlier this year.

Sprint Nextel Corp. (NYSE: S), the third-largest US wireless carrier, has not disclosed any plans similar to either AT&T’s or Verizon’s. There is talk that Sprint will offer a pre-paid iPhone from Apple Inc. (NASDAQ: AAPL) through its Boost Mobile subsidiary later this year. Earlier this week Leap Wireless International Inc. (NASDAQ: LEAP) announced that the first pre-paid iPhone would be available on its Cricket Wireless network beginning June 22nd. Leap’s pre-paid plan has no limit on data, but subscribers will pay for every byte they send or receive.

AT&T’s data-only plan only recognizes the reality that the so-called Millennial generation doesn’t talk. It communicates by texting and through social networks like Facebook Inc. (NASDAQ: FB) and Twitter.

The move to a data-only plan has a downside though, and that is a bigger demand for spectrum, already in short supply. How the wireless industry copes with ever-growing demand for bandwidth is the story of the next year or so for the carriers.

Paul Ausick

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About the Author Paul Ausick →

Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

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