AT&T: $99 All-You-Can-Eat Plan Selling Better Than Expected

An encouraging bit of commentary from AT&T: Its newish $99-per-month, all-you-can-eat calling plan is convincing more subscribers than it expected to spend more money each month on mobile phone service.

Before AT&T (T) introduced the new plan in February, about 1.5% of its new customers would sign up for rate plans of $99 per month and above, CFO Rick Lindner said during today’s Q1 earnings call. Now about 4% of new subscribers are signing up for the $99 monthly plan — almost three times the previous rate.

What’s it worth to AT&T? Not much yet, as some of their gains are being offset by other subscribers “downgrading” from monthly plans priced at $149 or $199.

But it’s still a good trend for the wireless industry: The average consumer spends about $50 a month on service, so anything that convinces more subscribers to spend twice that amount is great news.

Still unknown: Whether a $89 per month unlimited calling plan from Sprint Nextel (S) and cheaper all-you-can-eat service from upstarts MetroPCS (PCS) and Leap Wireless (LEAP), which are expanding their business into new, bigger markets, will eventually force AT&T, Verizon, and T-Mobile to cut rates further.

See Also:
AT&T Q1 Solid, No Scary Recession Talk, No iPhone Update
After mobile phone Companies Cut Rates, Wall Street Cuts Ratings
Wireless Price War! AT&T, T-Mobile Add $100 Buffet Plan

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