AT&T launched a prepaid wireless broadband service on Monday, following the lead of competitor Verizon Wireless.
Pricing for the new AT&T DataConnect Pass plans are the same as what Verizon Wireless is charging. Customers can pay $15 for a daily pass with a data usage cap of 75 megabytes. A weekly plan costs $30 and allows for 250MB of data usage. And the monthly plan is $50 and offers 500MB of usage.
While AT&T and Verizon Wireless have offered prepaid cell phone service for years, up until now the companies have required customers sign a contract for their wireless broadband services. Wireless broadband services allow users to connect their laptops to the Internet via the carriers 3G wireless network. These services have mostly been targeted at business users.
As these big phone companies move mobile broadband services into the mainstream, they are expanding their payment options to attract more consumers. But for many consumers in this tough economic environment, taking on a new contract and monthly service fee is simply too much. As such, the prepaid model is now moving to these services as well.
Prepaid niche players, such as Leap Wireless and Virgin Mobile, have recognized the demand for prepaid wireless broadband services, and they are already selling services to address the market. Leap Wireless offers an unlimited usage plan for $40 a month. And Virgin Mobile, which is now owned by Sprint, offers a $60 plan that has a usage cap of 1 gigabyte for a month.
Will these new prepaid offerings be enough to entice consumers to sign up for 3G wireless broadband service? That's a question yet to be answered. But AT&T, especially, should be careful what it wishes for. The company's 3G wireless network is already overburdened with iPhone users' heavy wireless data usage.