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AT&T Inc. (T) - free report >>
Apple Inc. (AAPL) - free report >>
Verizon Communications Inc. (VZ) - free report >>
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AT&T to Stop Charging Customers for Exceeding Data Limit
AT&T Inc. (T - Free Report) , one of the big players in the U.S.wireless carrier market, has announced discarding its policy of charging fees to customers exceeding data caps. The carrier will instead lower the connection speed – something which has been done by its rivals for a while now.
New Plans
Additionally, AT&T has been reshuffling its data packs in order to entice customers who have high data requirements. While raising data prices per gigabyte in the smaller packs viz 1GB/2GB data packs, the carrier is lowering the price of it’s large data packages like 30GB. This should be favorable for those who utilize data for watching online videos.
Industry Trend
AT&T and Verizon Communications Inc. (VZ - Free Report) communications has been under pressure from its smaller telecom rivals like T-Mobile US Inc. (TMUS - Free Report) and Sprint Corp. (S - Free Report) for both customer retention and addition. The aggressive stance of the latter two has compelled the former two companies to launch accommodative plans lately.
Notably, the competition in this space is intensifying, with T-Mobile registering high subscriber growth in the recent quarters. Furthermore, with the launch of new smartphones lined up, notably the iPhone 7 from Apple Inc. (AAPL - Free Report) , aggressive promotional activities are anticipated by these carriers to draw customers.
The Bottom Line
High market saturation and ever shrinking margins owing to escalating cost of promotional activities have been affecting the wireless carriers for some time now. Notably, industry players like AT&T and T-Mobile US are trying to diversify their operations geographically outside the boundaries of US, while trying to penetrate the rural parts of the country simultaneously. Conversely, due to high investments required for the implementation of the plan, as well as spending on promotional activities, we except high level of cash burn for sometime.
AT&T INC Price
AT&T INC Price | AT&T INC Quote
AT&T currently has a Zacks Rank #3 (Hold).
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