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AT&T May Make Smartphone Tariffs Cheaper, and It Should

According to a number of sources, and one direct hint from an AT&T exec, the network is thinking of cheapening its smartphone data tariffs. And actually it really has to, in the face of the Palm Pre and upcoming iPhone.

The biggest hint yet that AT&T is thinking of this sort of move came when AT&T's Mobility chief, Ralf de la Vega, spoke to Reuters. He noted "Right now we continue to study what is the best thing that is available, not just from an iPhone point of view, but what you can do to stimulate additional demand." Those are potent words, revealing that AT&T is concerned about keeping its market edge in terms of smartphones.

And it should be concerned. The hot-ticket Palm Pre is due June 6th on rival network Sprint, and its monthly tariff including calls and data runs to about $60. In comparison AT&T's cheapest iPhone tariff is $70, which includes a $30 per month data fee. That's why most rumors going around suggest AT&T would drop the data fee by $10, making a saving on $240 on a basic two-year contract.

But Apple is actually all-powerful at the moment. It's got a refreshed iPhone coming soon, that'll ride the wave of success generated by the previous two versions. AT&T's original carrier exclusivity deal with Apple is nearly expired, and it'll be wanting to get its hands on the new phone very much indeed. By suggesting a price drop, it may be able to woo Apple to keep the iPhone an AT&T-only product. But it might be a battle for the network to win that argument--Apple's own analysts will be looking very carefully at how to maximize profits, and may choose to go with multiple carriers, as they have in other countries. Almost any post about the iPhone on the web, for example, will garner at least one "I'd love an iPhone, but I'm not leaving Verizon," comment, and you can be sure Apple, and Palm--once their brief Sprint exclusivity is over--would love to get their hands on people like that.

A price drop on smartphone tariffs might be a smart move anyway--smartphone market share is rising at the moment, and all of the hottest phones garnering the biggest press attention are smartphones. But AT&T is a phone network--a famously money-grabbing entity--and the reduced tariff comes at the price of a limited data cap. Shouldn't necessarily be a problem though: my pre-pay Euro iPhone costs me just €25 ($35) per month and has a 250MB data cap, which I--tech writer and self-confessed gadget junkie--have never exceeded.

[Reuters via Wired

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