), the second-largest U.S. mobile service provider, plans to offer
shared data plan - Mobile Share - for its wireless services in late
August. The company's move follows its biggest rival
Verizon Communications Inc.
), which released the shared data plan - Share Everything - last
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The shared data strategy is considered the biggest innovation in
wireless pricing over the past several years. As the cell phone
markets are saturated and customers are hungrier for data rather
than voice, the new strategy will maximize the carrier's long-term
revenue, though it could slightly put pressure on monthly average
revenue per user growth in the short term.
There are various resemblances and differences between the plans of
Like Verizon, AT&T's shared data plan will provide unlimited
voice minutes and text, including video and picture messaging. It
will bundle data services across multiple devices and allow sharing
data on as many as 10 devices including smartphones, tablets,
laptops and other compatible devices. The company will offer shared
data plans to both new and existing customers.
Unlike Verizon, AT&T will not replace its existing individual
and family plans. Instead, it will offer shared data plans in
addition to the current plans.
Verizon charges $90 per month while AT&T will charge $85 per
month for one smartphone and one GB data. Under AT&T's plan,
the price of the smartphone will decline with higher usages. On the
other hand, smartphone price remains same even with the higher
usage under Verizon's plan. As a result, AT&T's plan becomes
cheaper when it comes to bigger data.
With the new wireless pricing plan, both AT&T and Verizon will
enjoy a competitive edge over its major rivals. The plan will put
the wireless business of
Sprint Nextel Corp.
) and T-Mobile USA, a unit of
Deutsche Telekom AG
) as well as prepaid wireless carriers such as
MetroPCS Communications Inc.
Leap Wireless International Inc.
) more at risk. These offer unlimited pricing plans and do not have
any intention to launch shared data pricing plans in the short
We are maintaining our long-term Neutral recommendation on
AT&T. Currently, the stock retains the Zacks #3 (Hold) Rank for
the short term (1-3 months).