Tech Untangled

 AT&T just announced the price plans for the iPhone. The monthly plans are as follows:

1. $59.99 for 450 minutes of voice, 5000 night-and-weekend minutes, Unlimited EDGE
2. $79.99 for 900 minutes of voice, unlimited night-and-weekend minutes, Unlimited EDGE
3. $99.99 for 1350 minutes of voice, unlimited night-and-weekend minutes, Unlimited EDGE

Also, the iPhone is only offered with a two year contract and there is a one-time activation $36 fee. Every plan also includes visual voicemail and other stuff.

These price plans are pretty standard and very competitive with the rest of the industry.

So, why is this a clear winner for AT&T?

In the Wireless industry, the primary metric for evaluating how well a wireless operator does is ARPU (Average Revenue Per User). Churn is another factor, which I’m sure Sprint would be happy to talk about. AT&T’s ARPU in the latest quarter (4Q 2006) is $49.29. Most of this ARPU comes from voice plans, but data ARPU is growing fast (53% growth in 4Q 2006). Nonetheless, the number of subscribers with voice and data plans are relatively small.

Herein lies Cingular/AT&T’s strategy for iPhone. By offering the iPhone with both voice and data (one cannot get a voice only or data only plan for the iPhone), AT&T will get a nice bump in ARPU.

Clever! very clever!