Report: AT&T may offer cheaper iPhone data plan

The following article is reprinted from the Today@PC World blog at PCWorld.com.

If you want an iPhone but are turned off by the high monthly service fees, some good news may be on the horizon. According to BusinessWeek, AT&T Wireless may offer lower-priced plans as early as late May. If the report is true, the starter iPhone plan would cost about $60 a month (plus taxes), a $10 reduction off the current low-end price.

This rumor has been floating around for about two weeks. Early this month analyst Michael Cote of Cote Collaborative Wireless Strategy told TheStreet.com there's a "strong possibility" AT&T would lower its rates as a tie-in with Apple's new iPhone model, which is rumored to arrive in June. As expected, Apple and AT&T declined to comment.

While Apple—and particularly iPhone—rumors are a dime a dozen, this one may have merit. For AT&T, a cheaper entry-level service plan could pull in on-the-fence buyers who love the iPhone but not the monthly fees that come with it. A $10 discount may not seem like much, but it could attract new subscribers, particularly if combined with a cheaper iPhone that's priced less than today's $199 iPhone 3G.

Lower-cost plans could also help AT&T ward off competition from Verizon Wireless, which is reportedly in talks with Apple to bring the iPhone to its current CDMA or upcoming LTE network. AT&T wants to remain the exclusive U.S. iPhone provider until 2011, and for good reason: Apple's blockbuster smart phone helped AT&T sign up 4.3 million iPhone subscribers last year, 40 percent of whom were new to AT&T.

Cheaper iPhone plans could also draw attention away from the upcoming Palm Pre, a feature-packed smart phone that will arrive on June 6. And they could make AT&T appear more competitive versus bargain wireless providers that offer all-you-can-eat plans for $50 or less.

For consumers, even those who don't want an iPhone, lower monthly fees would be great news. Competing wireless providers would feel the pressure to match or top AT&T's prices, and (hopefully) we'd all pay a bit less for wireless service.

It's unclear, however, exactly what limitations a $60 iPhone plan would bring. Would the bandwidth caps be too low for most users? Would AT&T nickel-and-dime these customers with overage fees? We shall see.

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