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.
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