AT&T to Require Data Plans for Smartphones

Posted by: Olga Kharif on August 21, 2009

Starting on Sept. 6, AT&T will require all new smartphone users to subscribe to the carrier’s wireless data plans, the company confirms to BusinessWeek.com.

Today, some of AT&T’s smartphone customers can chose not to buy a data plan, or they can subscribe to MEdia Net, a cheaper service that offers wireless e-mail and news access for as little as $2 per Megabyte. Currently, AT&T’s data plans range from $5 to $60 a month.

While I suspect that most people who buy smartphones subscribe to data plans already, there’s probably a hefty percentage that get smartphones for voice calls and good looks. They figure they might use them for data later. That’s the category of users AT&T is now hoping to rope into buying more services. And the move likely means increases in data revenues for the carrier — and slower sales growth for smartphone vendors.

Heavier monthly charges could deter some people from buying smartphones. For AT&T, that’s no great loss. The carrier spends a lot of money on subsidizing handsets so consumers get them at a lower price; and those subsidies may not pay off when expensive, feature-rich smartphones are not being used for data services, as intended.

The move, which is likely to be copied by other U.S. carriers, could slow down smartphone sales, however. So far this year, handset makers Apple, Research in Motion and others have booked double-digit revenue growth on smartphone sales. Well, that sales growth should come down as service plan prices go up, and consumers that only want the handsets for voice may opt for a cheaper option: a feature phone.

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Reader Comments

siphandone

August 21, 2009 06:02 PM

That's true for me... I bought cheap phone without data plan... $30-$35 is ok... $20 a month is even better when we are in Great Recession.....

Quint

August 21, 2009 07:21 PM

Verizon already does this for most of their smartphone lineup: All BlackBerry devices require a data plan; All other smartphones released after 11/2008 require a data plan as well. If I am not mistaken, the CDMA carriers require data plans for BlackBerry devices.

Sandeep

August 21, 2009 09:23 PM

Everyone would go for an iphone instead of other smart phones...........if the data plan is a compulsion

Disapointed

August 21, 2009 10:30 PM

That's really disapointing. I don't buy a "phone". I buy a Pocket PC that, oh by the way, also does phone calls. They do a HELL of a lot more than just internet access. I write software for mine to record my GPS coordinates while traveling, I keep spreasheets, play games, etc... all stuff that does NOT require online access. I also browse the web when I'm in a wireless network (using a local, wirelss router, not a $50/mo data plan). I used to pay $50/mo for a data plan, but it was worthless. I rarely actually NEEDED to access the web while outside of a wireless network. The IE browser sucks so bad, it's much quicker (and cheaper) to call information for a phone number, the 2 times I ever needed to do that.

Newt

August 21, 2009 10:35 PM

"...expensive, feature-rich smartphones are not being used for data services, as intended."

When one of those features is wifi, how can one argue that cellular data is intended? Plenty of "dumb" phones can browse the web, email, etc. Also, I'm curious how they will define a smartphone: RIM, OSX, Windows, and Android only? What about "feature-rich" phones that run on Symbian or a custom flash OS?

I have a smartphone with wifi. I have access to the internet at work and at home. I don't need it while I'm driving. I'll never pay for wireless data that I could make use of for less than 30 minutes per day, if that.

PhoneDude

August 21, 2009 11:12 PM

This is easy to get around, buy an unlocked, unsubsidized phone and you don't have to do their data plans, otherwise get the data plan and enjoy the cheap(er) phone. Pretty simple actually.

DaMan

August 21, 2009 11:38 PM

Most times that I ever consider using Internet access with my smart phone, I am in range of a wi-fi connection, anyways. At least they aren't forcing current customers to add data plans to their bills.

Al Sharpton

August 21, 2009 11:57 PM

QUINT---if you talk to customer svc at vzw, you can get around the requirement for the data plan. If you shop/buy online on their site, you can't get around it, but if you call their cust. svc....they can waive the data plan requirement.

BTH

August 22, 2009 01:03 AM

I need the ability to write long notes while talking on the phone (ie: take an order). I do not need a data plan. I really don't need a "smart" phone, but a normal phone can't store a memo, and I don't want to carry two devices.

BW Reader

August 22, 2009 01:49 AM

After the insurance industry it is the telecom industry that needs some major reform. Customers are forced to make expensive choices while they may not use all the extra loose ends that comes with a so called "smartphone". Another conspiracy to take people's money and run!!!

Sarah

August 22, 2009 07:32 AM

I lost my job in march (Parents pay the bill ) cancled my data to save 30.00 on the bill, If I don't removing my line all together( Its a blackjack 2 ) They will force a data plan?

Pedro

August 22, 2009 02:33 PM

To Sarah: I agree my blackjack 2 is also under my mom's plan and my job doesn't call me enough so as to make extra income...therefore I was also wondering if they were gonna force a data plan...this is not very good news...Its gonna suck if I have to cancel...What is AT&T thinking!?

thomas

August 22, 2009 06:23 PM

guys i know, the f*** you up in us. imagine; here in germany you buy a prepaidcard, (like t-mobile in usa) call for 0.08 ct a minute national and go for 20$ a month via flatrate or 0.24 ct each mb mobile in the internet... i am back for a year here in germany and see that here everything about the mobile internet mothly is getting cheeper. but dont worry, it will change soon in us. it is just cheaper for them to deal with prepaid systems.
by the way: why dont you go downtown to your dealer and buy a smartphone for 500, 600 bucks and use it with your simcard? there is always a starbucks w/ internet around. iphone is gone cost you at least 1000$ more ;-)

Nick

August 23, 2009 12:41 AM

Smart phones are overrated anyway! I prefer slim, float, phones that don't have a huge QWERTY keyboard.

Keep phones simple.

Meridian

August 23, 2009 09:58 AM

Phone Dude said it--if you want a "smart" phone, but are unwilling to pay for a data plan (which subsidizes the cost of the phone), then go buy an unlocked phone at full price. There Ain't No Such Thing As A Free Lunch.

Raymond

August 23, 2009 10:29 AM

This has been the case since with iPhones since OS 3.0 was released... To quote AT&T: "Could not activate cellular data network.You are not subscribed to a cellular data service.

Remember, all iPhone customers must have the iPhone data plan. In addition, the iPhone should be the primary device on the account."
This is true whether you purchase the iPhone through AT&T discounted or purchase it RETAIL. Further, AT&T says, "If the customer wants to continue to SIM swap and access data on the iPhone device, update the customers account with the iPhone IMEI following standard process. Next, add the iPhone data plan to the account." If you want to check this information for, refer to document ID: myc_eqp_isp_150123 dated 6-11-2009.

BMan

August 23, 2009 12:18 PM

We have a free wifi network at work. Why would I pay for what I already get for free. The only reason I got a smartphone to begin with has nothing to do with the internet. I need access to excel spread sheet while I'm out in the warehouse.

Davis

August 23, 2009 02:10 PM

WHat they should do is just like how Radio Shack handles their phones... Like right now we have the Xenon for $29.99 activated price IF you get unlimited texting or $49.99 upgrade... its $49.99 new customer and $69.99 upgrade if you do not get or already subscribe to unlimited texting.

They could easily implament the same type of structure into the smart phone playing field thus those who add data get the phone for X price and those who don't have to pay a little more but still get the benefit of a subsidized phone just not as great.

Although I agree buying an iPhone or any phone actually at full retail should completely eliminate all carrier limitations on having add-ons with your plan and even should discount your service because of the markup included to cover the would be subsidized phone

Suntop Kinseeker

August 23, 2009 04:11 PM

Well the thing is I DO USE THE INTERNET on my iPHONE, I like it tho it has a few issues. I was FORCED to put the iPHONE data plan on it, (Because the plan subsidizes the phone) I use the internet anyways, and I had tethering, now I don't need it at this time since you cant really tether the iPhone besides I got wifi here at my place from my neighbor who is 1 acre away from me. (N Routers are high power and great to have)

My iPhone connects to the wifi too so I am able to watch television on it (TV.COM app) I can chat on it IRC (but it disconnects when you receive a pop-up text message, I can watch YOUTUBE, I can watch any digital copy (because of the iPOD/mp4 format) the iPHONE is changing my likes of APPLE however the DRACONIC CONTROL of AT&T and APPLE when it comes to APPS is annoing, I cannot play my snes or anything on it like i can with the BlackJack II.

But none the less AT&T is a rip-off if you dont pay attention to your bill for 3 months they double charged me for internet, but the good thing is they refunded me it which gave me 2 free months of internet or a free month of service.

Anarchk

August 23, 2009 05:55 PM

AT&T has already done this for many of their phones. I bought Blackjack 2 when it was first released it worked flawlessly on my MediaNet data plan ($20 a month for unlimited data and 200 text messages) until one day it just suddenly stopped working. Called AT&T and the very rude support rep acted like nothing had changed and that I was lying about it working on MediaNet. There was no way that I was going to up from a total of $20 a month for my data and text needs to something double the price for the same speeds and service so I ended up switching to another phone that still works on the MediaNet service. Trust me they WILL eventually make everyone have to have this service because they know the sheep will just go with the flow because they don't know any better. Even today if you walk into an AT&T store and either attempt to purchase a smartphone via new contract or upgrade, they will say that the data plan is required. We ran into that when my wife was looking to upgrade recently. Ended up paying slightly more for an unlocked phone so she didn't need the data plan. One thing is for sure, when they decide to roll out mandatory data upgrades some of their oldest customers will jump ship.

Big Joe

August 23, 2009 06:15 PM

I have a smartphone , but I am currently using verizon. I don't use the data package much as I only get online on my PC... But I think this is a classic case where greed(on at&t's part) is going to bite somebody in the butt. Maybe at&t is not worried about the sales of smartphones dropping but in the long run it is going to come back to haunt them...http://huntfor.ws/phones.htm

Patrick

August 23, 2009 09:01 PM

I have given up on smart phones and at&t. Most of the lower priced phones don't have a standard 3.5 mm audio jack for mp3 files. I don't need internet access driving down the road. I need something in my pocket to read, listen to music, and play games on. I have an ipod touch 2g and a dumb phone. It serves me well and saves me a lot of money.

Kin

August 23, 2009 09:07 PM

Excuse me, bulky phones?

My e71x is 10mm thin, suckah. Just kidding about the suckah. But I rather love it. Perfect phone.

And I mean to add that it has all the useful features of a smartphone but relevant to this I don't have data on it...I just have unlimited texting because I make use of that- but adding the data would be too expensive when I mostly make use of the Gps and wifi.

Sascha

August 23, 2009 09:44 PM

That's why you buy UNLOCKED PHONE and YOU choose what service you are going to have. I have no intention of buying the services that someone ELSE is requiring me to buy. If they want to win me as a customer THEY should give me the choices and not terms! Outrageous!

Steven

August 23, 2009 10:08 PM

I currently have a smartphone with no data plan, luckily my provider allows Email access to count as Text Vs data, and now Facebook lets me update via Text too, so if it is a choice between a smartphone and an extra 30 bucks a month or a plain phone w/texting, i choose the plain phone.

Jim

August 23, 2009 10:19 PM

I have an iPhone 3GS. Before AT&T starts making data requirements, they should enable my phone for multimedia messaging. Something any phone with a camera can do.

Rich

August 23, 2009 11:17 PM

So if I buy a cable-ready TV, it should be a requirement that I subscribe to cable? Sheesh. I'd be quite happy with a nice cell phone and an iPod Touch - and I prefer it in a single unit. But the industry seems hell bent on making me buy a data plan which I don't need/want.

M.PATTERSON

August 24, 2009 01:09 AM

THIS IS PURE GREED ON ATT BEHALF ! I current went out and purchased RETAIL a unlocked smart phone (B.Berry 8220) for the features, not for the internet provided from a cellular company. I travel on commuter trains and Amtrak short distance routes often to pick up wifi if needed, listen to music via mp3s while messenger is silently running in the background, its exactly what I need. I don't plan to lug around 3 different devices.

Its atrocious and outrageous that CDMA carries already force customers to be on data plans even if they bought there phones retail. upon activating there ESN number automatically tells the company what product your using and your forced with a plan. that got me to switch to a GSM carrier. GSM was to be the guiding light that customers shouldn't be locked into phones and be able to swap and switch on the drop of a dime with no effect to there plan. Pretty much as it is over seas.

AT&T need to reconsider and act fast or I see a majority of customers with any bit of common seance jumping ship for T-mobile or other carriers just to show AT&T were not as naive or imbecilic as you think.

BBB555

August 24, 2009 07:32 AM

At&T and verizon are currently being investigated by the FCC. I hope they also look into this aspect of AT&T doing business by now mandating DATA Plans on their smart phones. People should FILE COMPLAINTS WITH THE BBB.

Bottom line is greed as someone else stated . Internet access on the phone sounds great in the beginning but the excitement will wear down as the size of the phone is just not practical for Internet browsing. I have Verizon and the Storm phone. I rarely use the Internet but I do find the GPS map util useful. I also have their Wireless card for Internet which I use more often than the Blackberry data plan

Rocky

August 24, 2009 12:31 PM

Has anyone else had an AT&T laptop air card w/lots of slow connectivity/connections w/IE? I have to restart my laptop and/or close and restart the Option wireless GT ultra and software. AT&T says I'm in an area w/great broadband recept and close towers- they're no help at all.

Michael Ludwig

August 24, 2009 02:09 PM

Guys, I think this news is talking about NEW SUBSCRIBERS. Existing subscribers can keep their smartphones with no plan changes required. That's my understanding.

kenny

August 25, 2009 07:22 AM

it is only for new subscribers... if you are forced to have data plan, you can terminate the contract without paying the fee... if att changes their policy and you don't like it, you can terminate any time you want without the fee....
i wish they force me to have it... so that i can terminate it... ^^

Linda

September 6, 2009 12:07 PM

ok so i work for att... and this is the policy on the smartphone data plan... if you have a smartphone before 09/06 then you do not have to have data package not required and wont be added on...it will be grandfathered in...just never change it or let anyone talk you into because you wont be able to go back....@ kenny you would still be charged etf fee if you decide to cancel your services...regardless of the change i advise you to read your terms and conditions and all that good stuff that came with your phone and can always find on the website...also if ppl havent realized all (now) cell phone companies required data packages on their smartphones... att are actually the last ones to require it ( major companies) simple thingis this if you have a grandfathered that u dont have it now or another type of package then youll keep it.. but any changes after today if u add it or remove ur grandfather package even blocking it next time u add it data package will be required...unfortunatly times are rough but you have to remember its a business....


its not that att is trying to make customers feel jipped or anything....their competing with other carriers around them (major companies) and mms is coming to iphone Sept 25...

Pepe

September 12, 2009 04:25 PM

Hi,
I just called today to AT&T and they told me that ALL smartphones will need a data plan. If you have a smartphone after 09/06 is already required, but if you have before 09/06 it will be required on November 2009.
Any news about this?

red_jellybean

September 12, 2009 06:40 PM

Linda, so one question for you since u work for att...I know I am grandfathered in to not have a data package, but if I get a smartphone now from private parties, but the phone needs to be unlock. I need to get att to unlock the phone for me...will att instill the data plan on me?

Heather

September 14, 2009 05:01 PM

The plan isn't required yet, but now I cannot receive or send pictures/video with my phone. I don't have a data plan and don't need it. Or do I? What will AT&T change next without telling anyone. They send stupid free texts all the time, why didn't they send one about this. If they can change midstream, why can't the customer.

Ami

September 15, 2009 02:50 PM

Okay, so I guess the only option someone who wants to use a smart phone without the data plan is to buy an unlocked one.

Where are reliable dealers for unlocked phones? I find limited warranty on these phones! The Nokia site shows the models I am contemplating to be out of stock.

What does a person do in such a situation? I am desperate to get a new connection, and now this is what hits!

TL

September 16, 2009 08:33 AM

That last line in Linda's post is just plain bull..."AT&T is just competing with other carriers"

This isn't competing, this is jumping on the band wagon to increase profits. Don't drink the Kool Aid! How is forcing someone to subscribe to something they don't need or want competing.

And this other bull about making the customer experience better so they aren't shocked by a high bill if they are using the per megabyte data plan - just make the only data plan the unlimited one and eliminate the others - plan and simple.

This is just horrible, I wanted to upgrade wifey's phone to the Iphone so she could text and have her music with her, there is plenty of wifi around if she needs internet access. Another $30 a month added to her plan is foolish, AT&T has lost my business.....

horrible horrible horrible!

Killakonabud

September 22, 2009 12:41 AM

Linda, I have an iPhone 3g can you explain why At&t does not have text messages included in this data plan? And why I'm paying $30.00 for data and $20.00 for unlimited texting. That's $50.00 I'm paying when other At&t phones have texting included in the data plan. Doesn't add up at all!!

xx

October 2, 2009 08:49 PM

[[That's $50.00 I'm paying when other At&t phones have texting included in the data plan. Doesn't add up at all!!]]

That is incorrect. AT&T charges $30/month data PLUS $20/month text for ALL smartphones (not just iphone).

Brian

October 4, 2009 12:36 PM

AT&T joing other competitors to require data plans I would consider collusion, or price fixing, this should be illegal and someone should be bring a class action lawsuit against these gold digging cell providers.

Ryan

October 4, 2009 02:59 PM

I need some help. My uncle gave me his original iPhone because he upgraded to the new one 2 weeks ago. I had an LG VU before and i just put the sim card in the old iPhone he gave me. My uncle never had the data plan he just used wifi. Am i able to use wifi at my house or just use it as a normal phone without changing my plan at all from the one i had with the LG VU? PLEASE HELP!!

jeff

October 8, 2009 02:00 PM

Can I buy one third party, unlock it, and then cancel the data plan? Or will att require the data even though the phone is unlocked?

This so pisses me off. I want a wifi, gps, personal organizer that does not need the internet to function. And I don’t text anyone. Why would att require me to add data? And why would they require some “smartphones “to activate the data plan, and then say, "Can be cancelled ant any time".

So, all I have to do is buy the phone, activate the data plan, and turn around and issue a cancellation? That is ridiculous!! So the loss of the data plan subscription to the subsidy is only 20 bucks!!! I pay a 20$ activation fee, cancel the data, and me and att are square now!? All of this over 20$!! att....are you retarded? Boost and cricket offer 50 unlimited everything plans. You have a better network. You could kill the competition by offering the same for your smartphones. This is ridiculous. I guess ill go by a palm pilot and move backwards.


make a phone for my demo. and dont call it a smartphone !!!!!!

Jerry

October 9, 2009 02:41 AM

This the most ridiculous thing. So whats the point on having wi-fi on your phone? I recently bought the Blackberry 8900 on ebay and went to At&t.
The guy was telling me I could get any plan with no contract as I was providing my own phone but since the phone was a BB I needed a data plan. Here is a way to get around it. You need to be off a contract though.
If you are on a position like me where you just need to use internet on school or at home where you have wi-fi then just get the plan they call Pick your plan not the pay as you go. pay $39.99 for 300 minute, you get mobile to mobile free(all my family uses At&t so there is no problem with me) and use wi-fi whenever you want. simple as that.

Nathan

October 13, 2009 08:37 PM

AT&T must make up for losing money on the phones they give away for almost nothing. If you don't want to take advantage of these discounts, then simply buy a phone from another source (or buy the phone at full retail price) and stop expecting something for nothing. For those that still complain, remember, there is always the pre-paid option. It's a service. If you don't like the service, don't sign up for it. AT&T is NOT requiring current users to add a data plan. It's strictly for those who purchase a new smartphone from AT&T at the subsidized price.

Headroom

October 19, 2009 07:53 PM

It doesn't matter if you got your smartphone from AT&T or if you bought it unlocked on eBay, they will force a data plan for it. There's no grandfathering. They know what phone you are using almost immediately, I've experimented switching my sim from a regular cell to a smartphone and then logon to my account, and the changes are registered almost at once.

Les

October 21, 2009 02:39 PM

I somehow missed the pre-announcements and was suprised this month to have the $30 data plan without choice! I too have an unlocked Treo, which I have used with my 5 line family plan for over 2 years--old contract finished in 2007. So I am under no contract with them. Lose 5 customers in order to get $30/month?!

Les

October 21, 2009 02:57 PM

I just located this on ATT's own website:

Q: I use a smartphone today. Does this mean that I need to sign up for a data plan?
A: If you purchased a smartphone prior to September 6, 2009 and are using data on a pay per use basis, you will not be required to add a data plan at this time. However, data plans let customers take advantage of browsing the mobile Web , search, advanced e-mail capabilities, applications, games, music services and more – without the worry of bill shock; we recommend that all smartphone users have a data plan.

DAnno

October 24, 2009 11:15 AM

It does not matter where or when you bought your smartphone. I bought my BJ 2 at a kiosk in the mall last year and just stuck my sim in it, no prob. But when I renewd my 2 years they said I would have to carry a data plan, regardless of the fact that no contract was tied to the phone

trey

October 27, 2009 08:45 PM

ihave a upgrade avaible and i want the samsung jack. it says that a 30 data plan is required. i dont use the internet so do i HAVE to get the date plan. i have ulimited texting but i dont want internet

FUforusingAT&T

November 1, 2009 09:20 AM

"Nathan" said, "If you don't like the service, don't sign up for it. AT&T is NOT requiring current users to add a data plan. It's strictly for those who purchase a new smartphone from AT&T at the subsidized price."

Wrong.

This is for ANY phone that the AT&T network reads as a "smartphone" which is based on the devices IMEI.

If you have a smartphone on AT&T's network, regardless of whether you bought it at the "subsidized" (and you are ignorant of the true meaning of what you're saying there) price, the full retail price through the store, online, ebay or another carrier's unlocked device.

IT DOES NOT MATTER.

It doesn't matter whether you use data or not. It doesn't matter whether you WANT data or not - if you have a device read by the network as a smartphone that wasn't grandfathered in, YOU WILL BE CHARGED FOR A DATA PLAN.

Read it right there in the "new" TOS - if they see a data plan on your account, and they will, they will add the charge.

And since it's an automated system it doesn't matter how many times you call and "cancel" it - it will come back the next time your phone is authorized by the network as a "smartphone."

Simple, and stupid, as that.

And to those lowlifes who say, "duh, um... why would yous wants a smartphone without data plans ur jus like um dum," first off, it's not your business. Second, there are plenty of features offered on a smartphone that don't need or require data. The only thing that requires data is the movement of information OTA.

And AT&T's current crop of "messaging" phones are garbage. The only one that even comes close to a smartphone is that orange Samsung phone, and even it isn't all that great.

Forcing people to buy services they don't want and don't use is WRONG, and their silly justification that they're "improving customer service" is wrong too. Its a power grab, plain and simple...

Jay Money

November 24, 2009 09:43 PM

Please read this before signing with a cell carrier in the United States. AT&T and Verizon are doing something criminal by forcing people to buy a data plan they do not need. They restrict or prohibit tethering so they can force people to spend on services they do not need. This policy is theft. Here are the facts.

1) Verizon sells the mifi device, they sell wifi cell phones and force you to use their data plan on both the mifi device and the phone. WHY?

2) AT&T charged me for tethering $60 / month and cannot get it to work on my HTC phone while connecting me to HTC for support who tells me I have to hack the phone to get it to work because of the AT&T code to restrict it. If I hack the phone it voids my insurance.

THIS IS CRIMINAL!

Why cant i buy a pda phone and only use it for phone and wifi?

Hmmm?

AT&T and Verizon are stealing people's money.

Check it out!

AT&T Sucks

March 4, 2010 10:40 PM

I called AT&T this morning and told me that there was no data plan was selected on my contract, however they told me that machine will automatically detect device and add data plan to your cell phone if it was a smartphone. Then I asked if I could selected a low-rate data plan and they said no. Then I asked them to show me the contract and they said it didn't matter how kind of contract that you have signed, it's mandatory for all smartphone, they could not change that since it was detected by the machine (sound familiar, THE MATRIX). AT&T sucks. I just filed my complaint on FCC. The complaint refence number is: 10-C00200820.

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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