AT&T is looking to provide its copper VDSL2 and fiber broadband customers an easier-to-understand view of their plans by whittling down its offers.
Under the new structure, AT&T is now offering three main broadband speed plans:
Internet 50: Customers can get up to 50 Mbps for $30 as part of a bundle of services, while a standalone connection costs $40. Each of these plans requires a one-year contract.
Internet 75 and Internet 100: AT&T Internet speed plans with speeds from 75 Mbps up to 100 Mbps are $50 per month when customers also purchase another AT&T qualifying service with combined billing and a 12-month agreement, or $60 per month for internet-only with a 12-month agreement.
Internet 1000: Eligible customers who reside in an AT&T FTTH-enabled market can get the Internet 1000 plan, which offers 1 Gbps symmetrical speeds for $70 as part of a bundle or $80 on a standalone basis.
One of the interesting selling points of the offerings is that AT&T is waiving the cost of the modem and associated Wi-Fi gateways.
Cheryl Choy, VP of wired voice and broadband products for AT&T, told FierceTelecom that these new plans give customers an easy-to-understand set of options.
“AT&T has been working hard over the years to continue to drive clarity with our customers and deliver more simplified internet plans,” Choy said.
These new tiers also fit in with AT&T’s move to shutter its U-verse voice and broadband brand.
In 2016, announced plans to phase out its long-standing U-verse voice and broadband brand.
This means that a customer who subscribes to a 45 Mbps broadband plan will now see the service referred to "AT&T Internet" and the tier named AT&T "Internet 45." Likewise, the telco has renamed the voice service "AT&T Phone."
By consolidating its speed tiers down to three, AT&T hopes it can help customers better understand what service options they have for service.
AT&T is targeting these tiers to new customers only.
This has been a steady, ongoing process for AT&T. It was only two years ago that AT&T had over 10 tiers, for example.
“It has been confusing in the past,” Choy said. “For instance, in 2015 we had 10 speed tier plans and in 2016, we reduced it down to six plans and now we’re reducing it down to 3 plans.”
In each of those speed increments, AT&T has increased the speed availability at what it says is the lowest price point.
“Up to 50 Mbps speed plans are for $40 a month and if 50 Mbps is not available they’ll get the next fastest speed for $40 a month,” Choy said.
Choy said that the new plans are resonating with new customers.
“We have seen a great response rate from the customers,” Choy said. “It’s just easy to remember 50, up to 100 and 1000. You can visualize it and understand it.”
In its copper-based markets, AT&T has been continually upgrading its last mile plant to support a range of 50 and 75 Mbps.
The 75 Mbps tier and its expansion into new markets is part of AT&T's multibillion dollar Project VIP effort that was launched in the fall of 2012 for its existing copper-based broadband U-verse network.
Fiber’s symmetrical focus
For customers who can get AT&T’s FTTH service, they will be able to access speeds from 50 Mbps to 1 Gbps.
What will help set AT&T apart from cable competitors is that all of the tiers offer symmetrical speeds.
“We continue to make upgrades to our network, especially in our fiber installation,” Choy said. “We introduced a 50 Mbps speed in our fiber network and what’s exciting about that is we offer symmetrical upload and download speeds.”
AT&T continues to make progress in rolling out its FTTH network.
As of the end of the fourth quarter, the service provider said it was ahead of its FTTH build-out schedule with 4 million consumers connected to the network.
John Stephens, CFO of AT&T, said during the fourth-quarter earnings call that after it launches a “fiber network in a market, we’re seeing more than half of our broadband customers purchase speeds of 100 Mbps or higher.”
Stephens later told investors that it might go beyond its commitment to build out FTTH to 12.5 million homes by 2019.