Big fans of services like mobile video streaming may switch to Sprint Nextel Corp after AT&T Inc's move to impose usage caps on its unlimited data customers, but analysts do not expect a mass exodus. AT&T announced a new policy on Thursday limiting high-speed wireless data usage for its 17 million customers who still subscribe to unlimited data plans. The move angered some customers who think they should be entitled to unlimited usage if they signed up for an unlimited plan.
AT&T said it needs to limit the data use of its most avid customers, or face degraded service for all its customers as the popularity of data-hungry smartphones and tablet computers is straining the No 2 US carrier's network. After customers reach their monthly limit of data usage, they will still be able to surf the Web and receive emails, but their service will not work as well for the rest of the month.
Customers will notice the biggest difference if they try to stream video, AT&T said. Under the new rules customers would come up against the limit and have their service slowed down after they have watched roughly 10 hours of high-definition video, according to AT&T's network estimates. Since the company's smaller rival, Sprint, still offers unlimited data services for a flat monthly fee, some frustrated customers may opt to leave AT&T for Sprint due to the change. "It may, on the margin, hurt them a little bit," said Stifel Nicolaus analyst Christopher King, who expects Sprint's marketing to focus on this difference as it seeks to attract new customers. However, customer departures to Sprint may be limited by several factors, analysts said. For one thing, most AT&T customers have committed to two-year contracts so they would face a hefty penalty if they left the service before the end of their contract.
And many of those contract customers are signed on to family plans, so they may balk at moving the entire family to another service, analysts said. "Sprint's message of unlimited will resonate a little better now there's all this negative publicity around AT&T," said Bernstein analyst Craig Moffett. "But the fact customers haven't left (AT&T) yet tells you these relationships are stickier than people think."