Sorry!! The article you are trying to read is not available now.

AT&T Hikes Data Costs Without Much Reward

Print comment Post Comments

When it comes to our nation's mobile providers, AT&T (T), Verizon (VZ), Sprint (S), and T-Mobile are the almighty middlemen. Massive megacorporations monetizing a product at an egregiously inflated price -- a product that becomes superfluous and unnecessary under increasingly common conditions. They are big, powerful, and wield immense pull with our government, allowing them to do pretty much whatever they want.

In short, they are the oil companies of the smartphone world.

So when more and more customers are pushing the carriers' outdated infrastructures to their very limits with their iPhones (AAPL), Droids (GOOG), BlackBerries (RIMM), and Windows Phones (MSFT), the providers have to find some way to recoup the costs of expanding their networks. And since voice and texting plans can't get much higher given dwindling demand, all that's left is data.

And they've ruled over those data plans with an iron fist. They've ditched unlimited plans, throttled the more active customers, and even threatened to punt them off the network if they don't reduce their usage. Now, it's a delicate game of giving just enough to keep customers hungry and willing to renew their two-year contracts.

As such, AT&T managed to eke out a few extra dollars from its customers with a new data plan lineup.

The old pricing plans provided 200MB, 2GB, and 4GB with tethering for the respective prices of $15, $25, and $45 per month. Now, for an extra $5 per month, customers can choose from 300MB, 3GB, and 5GB data options. So while the monthly fees have been hiked, AT&T stresses that the cost-per-byte has gone down.

But will subscribers really reap the benefits?

Each network has long claimed that the vast majority of customers use less than 2GB per month -- roughly 95% of them. While data usage has gone up -- enough that 300MB per month is a laughable and highly unreasonable limit -- will many subscribers find that an extra gigabyte is worth $30? Especially when it was only 18 months ago that $30 bought you unlimited data.

The bright side is that AT&T is recognizing customers' need to access more data given the rise in photo sharing, video streaming, and mobile chat. However, it's no surprise that the cost, for many, outweighs the reward.

(See also: iPhone Can't Match Android's Versatility, Says Steve Wozniak and iPhone Users See a Brighter Future Than BlackBerry Users, Says Study)

For an investment angle on these and many more tech stocks, take a FREE trial to the TechStrat Report by Sean Udall.
POSITION:  No positions in stocks mentioned.