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The Real Numbers Behind AT&T’s Price “Increase”

It has been interesting to watch the reaction to AT&T’s price “increases” today – interesting in that most of the chatter on AT&T’s rate increase focuses solely on prices going up.  There really is a bigger story there:

 First, the increases:

AT&T Data Plus 300MB: $20 for 300MB
AT&T Data Pro 3GB: $30 for 3GB (up from $25)
AT&T Data Pro 5GB: $50 for 5GB, with mobile hotspot / tethering

The lowest tier is $5 higher (33%) but comes with 300MB instead of 200MB (50% more).  The net effect is a reduction in the cost per 100MB from $7.5 to $6.66. If my math is right, that’s about an 11% decline.

The middle tier also rises $5 (20%) but comes with 3GB instead of 2GB (50% more).  So the cost per gigabyte actually dropped $2.50. A net reduction of 20% per GB.At the high end, the rate has actually dropped by $5 from $55 to $50 (see this price chart from PCMag just a few months ago). That’s a 9% decline.

Most of the coverage I have seen mentions the rate increase only in the lower and middle tier. I suspect the reason nobody is commenting on the higher tier in most of the coverage is because it contradicts the “rates are rising” storyline.  Why let facts get in the way of a good article, right?

The price drop for heavier users, and the fact that you are paying less for the equivalent amount of bandwidth, is largely unreported. I guess it just doesn’t fit with the established narrative that telecom companies are out to take more money but not improve service.

Written by Michael Turk