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New AT&T data plans threaten to stunt the growth of mobile internet radio

AT&T Iphone with stopwatch

Last week AT&T announced that new smartphone customers will no longer be eligible for the unlimited data plans that current customers enjoy. Instead, two somewhat less expensive plans will be available. For $15 new customers may download 200 MB of data per month, with a charge of $15 for every additional 200 GB over the limit. 2 GB per month will cost $25, plus another $10 for each 1 GB after that. Current data plan customers pay $30 for unlimited data. For its part AT&T says that either of these new plans provides enough data to satisfy 98% of their customers.

While it may be true that the vast majority of AT&T customers use less than 2 GB of data in a month, I would argue that’s because data-hungry mobile streaming media is just starting to take off. But the these new caps threaten to stunt that growth just as mobile internet radio is gaining steam.

The 200 MB of data offered by the least expensive plan covers only about 200 minutes of streaming stereo music at the common bitrate of 128kbps. And that’s without any other data usage for email, web browsing or anything else. Even listening to a lower-quality mono talk station at 32 kbps will only stretch listening to 800 minutes, or 13 hours.

The 2 GB plan will cover about 34 hours of stereo music and as much as 136 hours of low-bitrate mono talk. At first blush that seems like a fair amount of listening time, but how does it measure up against real-world radio listening? Someone whose commute lasts about an hour each way will easily listen to over 40 hours of radio in a month. If that commuter wants to use her iPhone or Blackberry to listen to Pandora, or another streaming music station she’ll be over her limit by the last week of the month.

Without access to hard statistics on how many hours the average mobile Pandora or user listens it’s hard to say for sure how many new AT&T customers are likely to be affected. However, I do think it’s fair to say that these limits will make many smartphone users cautious about how much time they’ll spend listening to internet radio on the go, especially in order to avoid overage fees.

Of course, AT&T is not the only wireless data carrier in the US. As long as you don’t have your heart set on an iPhone there are lots of other carriers to choose from who still offer unlimited data plans. But for how much longer? Computerworld quotes several analysts who predict that Verizon, the nation’s second largest carrier, will set caps in as soon as six months. While there may be some pricing competition on these plans, I’m guessing they’ll offer pretty similar amounts of data for prices that only vary by a few dollars a month.

With a cost between 75 cents and $4.50 and hour, listening to mobile internet radio on an AT&T smartphone starts to look pretty uncompetitive compared to traditional broadcast, which is free, or satellite radio which offers unlimited listening for $10 – $20 a month. While it may be inevitable that the days of unlimited data plans will come to an end, I hope that the metered pricing quickly becomes more reasonable, permitting a reasonable amount of streaming radio listening. If not, this vibrant new way of listening to radio might be stunted before it has a chance to blossom.

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0 Responses to New AT&T data plans threaten to stunt the growth of mobile internet radio

  1. James June 6, 2010 at 5:55 pm #

    Just another move by the terrorists at ATT. The general public being economically abused by the the CEO/CFO/COO terrorists at ATT rise and revolt!!!!

  2. Jennifer Waits June 6, 2010 at 6:51 pm #

    Thanks for putting this into perspective. Glad I’m grandfathered in to my original AT& T plan!

    On the flip side, I wonder if the increasing cost of listening to music on mobile devices will lead some folks to terrestrial radio. I do keep wondering if there’s a revolution brewing on the dial and that we may end up being surprised by the resilience of AM and FM.

  3. Matthew Lasar June 6, 2010 at 8:20 pm #

    Great article. Yikes! I’m gonna get a Droid!

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