Carriers to Compete on Data Plans, Not IPhone 4S

AT&T, Verizon and Sprint, all of which carry the iPhone 4S, will compete on data plans, rather than devices, in an attempt to differentiate their offerings and lure subscribers.

Apple’s iPhone initially was exclusive to AT&T, which ramped up its network on the popularity of the device. But in January, the iPhone arrived at Verizon, chipping away at AT&T’s competitive advantage. Now with Sprint carrying the latest Apple handset, nearly all major U.S. carriers are on an equal footing with their Apple offerings and are shifting emphasis to their services and plans to compete.

All three carriers switched from unlimited to tiered plans last year, leaving them to battle largely on the price points of their services. With the holidays fast approaching, the carriers are expected to offer cheaper data plans at a better value to attract subscribers.

Sprint, which received the iPhone 4S, capped its $30 unlimited hotspot plan at 5-gigabytes of data, marking a big change for a company that previously touted unlimited plans to differentiate its service.

Customers will now need to pay overage charges at five cents per megabyte. While the base cost is cheaper than rival plans, subscribers may end up paying more after using the iPhone’s apps and updated features.

Meanwhile, AT&T customers can also expect a tiered data plan. Customers with unlimited plans who go over a certain amount will have their speeds decreased, or throttled, during the next billing cycle.

AT&T, which has carried the iPhone since its 2007 release, witnessed a 8,000 per cent increase in data usage due not only to Apple’s device but also other smartphones.

Verizon also ended its unlimited data plans in July, so new customers must sign up for tiered plans for a certain level of data use.

Consumers shopping for the best plan to pair with their iPhone 4S handsets may risk high termination fees to break their contracts, meaning money saved by switching carriers may not be worth the cost spent on termination fees.

Sprint bumped up its early termination fee and changed its return policy, while Verizon plans to charge additional costs for upgrades.

Apple’s iPhone 4S features a faster processor, 8-megapixel camera, Siri virtual assistant and HSDPA Internet access. The device runs on both CDMA and GSM networkings and goes on sale on October 14 for $200 for 16-gigabytes, $300 for 32-gigabytes and $400 for 64-gigabytes.

This post originally appeared at Mobiledia.

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