By Alexandra Burlacu | May 10, 2013 11:21 AM EDT
AT&T is delving into a new prepaid wireless service by launching a separate brand called Aio Wireless, aimed at more data-centric users.
Aio (pronounced "A-O") is an AT&T subsidiary. While AT&T already offers prepaid services, including its Goo Phone brand, the carrier aims to draw more data-focused users with Aio and expects to operate most of its business through retail stores dedicated to the brand. Prepaid customers brought great business to smaller wireless carriers, while dominant carriers AT&T and Verizon Wireless focused on other endeavors.
Aio's initial launch covers select stores in Houston, Tex., Orlando, Fla. and Tampa, Fla., with additional stores set to open in those markets over the coming weeks. Aio will reach additional U.S. markets over the rest of the year. Aio customers will have "unlimited" service on AT&T's 4G network; that is, unlimited here means service will be throttled after reaching a plan's data cap. Despite AT&T's LTE capability, speeds on the network are capped at 4Mbps.
Aio customers will be able to choose from a range of smartphones, tablets and feature phones from Samsung, Nokia, ZTE and others. Aio also carries Apple's iPhone 5 for $649 and the iPhone 4S for $499. The good news is that customers can also bring their own unlocked, compatible devices to the service.
The Aio wireless service will come in three tiers: Basic, Smart and Pro. The Basic tier provides 250 MB of data per month for a $40 monthly fee. Smart costs $55 for 2GB of data per month, while Pro offers 7GB for $70. Customers can also pay $15 a month to add 250MB for a tablet. Adding 1GB of data to a plan costs $10 per month.
"Traditionally, value customers were more voice- and text-oriented, but they are shifting to more data use," explains Aio Wireless president Jennifer Van Buskirk, according to the Wall Street Journal.
As prepaid service typically doesn't include a credit check or a service contract, carriers generally see prepaid customers as less profitable with higher turnover. Van Buskirk said the Aio venture does not aim to steal contract customers from AT&T or other carriers. The Aio president further added that this move is not in response to T-Mobile's recent "Uncarrier" shift, although Aio's price range of $35 to $70 per month is similar to T-Mobile's plans. Although the service will run on AT&T's network, it will not include access to its high-speed next-generation LTE services.
AT&T is the second-largest carrier in the U.S., with Verizon as the largest in terms of customer base. The last quarter, however, Verizon trumped AT&T in customer growth, adding more than twice the new customers AT&T did.
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