AT&T No Longer Offering Unlimited Data Plan To New Customers

from the no-longer-to-infinity-and-beyond dept

As they had previously hinted, starting June 7th, AT&T’s new smartphone customers will no longer be able to opt for the $30 unlimited data plan that was previously offered. Instead, two plans will be offered, both with monthly usage caps: $15 for 200MB or $25 for 2GB. Additionally, tethering is now available for an additional $20 a month. However, tethering is only available with one of the new capped plans. Those who already have the old $30 unlimited plan will be able to keep it… but won’t be able to tether. So, existing power users have to decide between $30 a month for unlimited internet data without tethering, or $45 a month for 2GB of data with tethering — of course, with tethering, data usage would likely go up… even as the amount of data you can use goes way down.

AT&T’s motive behind this switch (beyond the obvious of boosting profits) is to attempt to address the network capacity issues that it has been experiencing, of late. As anyone on AT&T can attest, performance of the AT&T data network is far from stellar. The adoption of smartphones like the iPhone have made the internet a truly useful part of the mobile experience, and as such, data use on the AT&T network has risen dramatically as a result. Clearly, AT&T was not able to properly plan to handle the increased demand on its network, and as a result, is claiming it needed to respond by throttling the usage. Of course, one might argue an alternative would be to invest more in capacity, but that gets in the way of that boosting profits thing.

Amusingly (but not surprisingly), AT&T is trying to play this whole thing up as a big benefit to consumers:

“Some customers, up until now, have been hesitant to sign up for a $30 monthly data plan” for unlimited access, says Ralph de la Vega

Fair enough, but just because some people have been hesitant to sign up for the unlimited data plan doesn’t mean you should do away with it altogether.

That said, there are actually a few things that AT&T has done right with this announcement. It’s surprising that they are actually offering a cheaper tier for limited data — something that they had not offered before. Also, with the limited plans, they have introduced a system of alerts that will notify users when they are near their caps. And, existing users with unlimited plans can continue as long as they want, without the tethering option, of course.

Even so, throttling usage could put a damper on the explosive growth of smartphone usage that we have seen in the past few years. There is an added cognitive transaction cost whenever a limit exists, so, by introducing these limits, AT&T has effectively made the iPhone less appealing. Recently, when asked about AT&T’s capacity issues, Steve Jobs said “things, when you start to fix them, get worse before they get better. That’s what I’m told. And if you believe that, things should start getting a lot better soon.” It sounds like Jobs knew what was coming.

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Companies: apple, at&t

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Fletcher says:

Verizon soon to follow, and hopefully no others

I’ve read a few places that Verizon is suggesting doing something similar. Hopefully there is enough competition in the space that competitors will aggressively advertise the unlimited aspect of their plans. If they don’t, then I would fear that all the carriers might be heading in this direction together. Hopefully not because I like never having to care about how much data I’m using.

As an aside, it might then have been in Apple’s best interest to not support Flash. You can run your customers into huge data bills quickly if they spend all day watching videos or playing flash games.

TheStupidOne says:

Re: Verizon soon to follow, and hopefully no others

I just sent an email to Verizon. While I know it will likely never be seen by anyone of importance, I thought it might help them make the right decision. I told them how alarmed I was by the news about AT&T and how grateful I was that they sill had unlimited plans. I encouraged them to go on an advertising campaign trumpeting the fact that they have unlimited plans while “the other guys” don’t. I also told them how comforting it is to not have to worry about going over my limit and said that I’d never be happy if I had a limit again.

minijedimaster (profile) says:

Re: Re: Verizon soon to follow, and hopefully no others

You should be careful about any provider’s “unlimited” data plans considering all of the press in the past about those so called unlimited plans being limited in the terms of service to 5GB per month. Maybe it’s different now but I know in the past this was the case from multiple providers (Verizon and T-Mobile are the two that come to mind).

TheStupidOne says:

Re: Re: Re: Verizon soon to follow, and hopefully no others

It is still the case, and I’m honestly not sure what Verizon does when I go over their “unlimited” plan’s limit because I haven’t yet (I don’t think)

I did just get this from Verizon Customer Service:

“Wow, it sure is nice of you to take the time to let us know that you like the unlimited data option. Thank you! My name is Nikkie, I am delighted to pass your message along to the appropriate department.

I have not heard any rumors or plans about removing the unlimited data, so I can tell you with confidence that you can keep your unlimited data plan as long as you like. We have no plans to change the data plans at this time, as we offer unlimited options, and certain phones can also choose a limited data plan if they want to, we feel that we have covered all the bases, and so far this is working very well for us.

thank you for giving me this opportunity to confirm our intention to keep the unlimited data plan for your phone. If you have any further questions or concerns, please reply to this email, and I will be delighted to assist you further. Thank you for choosing Verizon Wireless.”

So hopefully they aren’t going to follow the path that AT&T is setting.

Fletcher says:

Re: Re: Re:2 Verizon soon to follow, and hopefully no others

I’m impressed with the response you got from Verizon — so personalized.

Hopefully Nikkie is right and Verizon has backed-off of considering this path. Best case scenario (as I see it):

1) at&t experiments with caps alone

2) caps are an obvious and spectacular failure

3) the entire industry accepts the consumer’s desire for unfettered access and builds-out thier networks to support vastly greater bandwidth.

4) 5GB/month becomes the new light-bandwidth user.

I know…I’m dreaming on numbers 3 and 4, but 1 and 2 could maybe, perhaps happen.

Anonymous Coward says:

It seems like they just don’t want people having an unlimited plan combined with tethering. Of course, people who have jailbroken their phone already have this, which is why they may have gotten rid of the unlimited plan all together to try and mitigate that. I bet the majority of their heaviest data users have jailbroken phones and are tethering.

It is nice to see them reduce their ridiculous overage charges, but overall this just seems like a move in the wrong direction.

Anonymous Coward says:

if a cap on usage stops mobile users from running bandwidth hog applications, then it is likely that the mobile experience will be improved for more users. if they double the potential capacity by limiting a small minority, then isnt it a good thing, at least until the network can grow and catch up?

Spaceboy says:

Re: Re:

No. ATT knew ahead of time that it has a shitty network and all these data devices would have a negative impact. So instead of focusing on delivering what they promised they decide to limit everyone’s’ potential. And now that they have caps in place, they will NEVER have an incentive to improve their already crappy network.

Derek Kerton (profile) says:

Re: Re: Re:

“ATT knew ahead of time that it has a shitty network and all these data devices would have a negative impact. So instead of focusing on delivering what they promised they decide to limit everyone’s’ potential”

Because they should have expected a 5000% increase in data use over two years, right?

Please tell me what business you are in, and explain how your business has invested in expensive infrastructure to ensure you have capacity for 50x of current sales volumes.

bryan (profile) says:

Re: Re:

The main reason that ATT’s network is so bad is that they have decreased their spending on network every year since the iPhone launched. If ATT had been investing in their network for the last 4 years then it would be different, but they have made no effort to keep up with the demands being placed on their network. ATT created the problem by not investing in their network, and now rather than spending the profits they are making from the increased fees charged for smartphone services to improve the network they are limiting their customers. Do you think they are going to stop marketing the iPhone and all of the data heavy apps it can run to customers?

Derek Kerton (profile) says:

Re: Re: Re:

The stat I recall was that they invested 19 billion in infrastructure in 2009.

You are stating a falsehood with: “…they have made no effort to keep up with the demands being placed on their network.”

The effort is twofold: invest in the network, and switch to a pricing model that makes users, content sites, and developers be more conscious of how they use a limited resource.

Just as we pay for water based on usage with our home water meters.

Anonymous Coward says:

Re: ATT network = crap

forget tethering they can’t even handle lots of phones in one place.

I went to the USA vs Turkey soccer game in Philadelphia on Saturday and I couldn’t even get or send email or anything else other than make calls for the entire event.

I had full bars and tried switching down to edge with no different results.

I found it amusing that AT&T has multiple ads in the stadium for their service but I can’t actually use it in the stadium do to all the phones there.

Bengie says:

Re: Re: ATT network = crap

GSM uses channels and timing. Too many people in one place will use up all of the available channels.

CDMA gets around this issue using math and many people can use the same channel at the same time w/o causing issues. But it requires a clear signal and lots of CPU power to crunch the math. A clearer signal usually means more power to the tower.

Derek Kerton (profile) says:

Re: Re: WTF sort of scale is that?


good observation. In fact, putting in the network that offers fast data, putting in a large footprint around the country, and subsidizing a smartphone are all somewhat fixed costs, and they play a big role in the cost of offering mobile data.

So the lower tier users should pay more per MB, and your rough calculation is a good way of looking at it.

What I don’t get is why AT&T felt the need to stick it to customers with the $20 tethering charge. If we are paying for our tiers of service, it should not matter how we use our purchased throughput.

medlaw (profile) says:

Is the loss of tethering

w/ you unlimited data plan a big deal?

I avoid AT&T like the plague so it does not mean anything to me. Smart phones are making mobile use of laptops less important. Couple that with the ubiquitous nature of Wi-Fi hotspots and the tethering issue shrinks in importance. Just another public relations black eye for AT&T. One day another company will get the iPhone and this company’s users will flee.

Pangolin (profile) says:

This really isn't bad.

AT&T was never unlimited. Their cap is 5GB like everyone else. If you get an “air card” it is $60.00 a month for the 5 gb and then a dime for very 1mb after that.

So with this new plan if I used 5gb – which rarely happens –
it would be 25 + 10 + 10 + 10 = 55.00 still less than the $60.00 plan and if I go over it’s WAY cheaper.

So in the end – I don’t think they are lying in their spin.

zingy says:

Re: This really isn't bad.

Um, the “air card” plan isn’t directly comparable to the “$25/2gb” plan. You need to include the $20 tethering charge on top of the $25/2gb if you want to compare.

25+*20*+10+10+10 = $75/month for the equivalent of a $60/5GB “air card” plan.

Sorry, but it’s going to be more expensive.

davebarnes (profile) says:

When I first read about the new pricing, I was angry

but, not anymore.

I checked my wife’s iPhone usage (she loves her iPhone and uses it a lot) and found that her highest month was 55MB.
Yes, her highest month was 1/4 the limit of the new $15/mo plan.

We will start “saving” $15/mo beginning on June 7th.
I say “saving” because this means that our daughter will inherit Mom’s iPhone when Mom buys her new iPhone4.

Bandit'sBassGirl says:

Re: Sprint has already done this

I left ATT after like 10 years with them. When I got my iPhone,.they told me I would never go over the 2gb. I did in one weekend. i called and threatened to leave cause I had unlimited before. They promply.gave me the unlimited for $30. Turned out I hated the iphone and got the captivate. Later one family.memeber was up.for an upgrade. He wanted an android. So i left and went to Sprint.
They do.offer unlimited data and i love it!

Dustin Jones (profile) says:

Using statistics to say what you want...

From att’s press release: “Currently, 98 percent of AT&T smartphone customers use less than 2 GB of data a month on average.”

I don’t doubt that, but averaged over what time though? Contract life?

If I use 3GB one month, then .5GB the next, my 2 month average is less than 2GB but att will be more than happy to hit me with an overage charge that first month; of that 98%, what percentage would be hit with overage in at least one month of their contract? I’d bet a large percentage of that 98%.

I have no problem paying for what I use, but it needs to work both ways; if I use significantly less than 2GB in a month, why do I still have to pay $25? Why can’t they do rollover data? Why can’t my data plan be dynamic? e.g. if I use

Derek Kerton (profile) says:

Re: Re: Using statistics to say what you want...

It is somewhat dynamic. Have you looked at the new overage charges? They are not punitive, in fact, they are discounted from the price of the first 2GB. So, in the months where you go over 2GB, you automatically by a third at a discount.

This non-punitive overage is a very important part of the new AT&T pricing, and one of the best parts of it from a consumer’s perspective.

Dustin Jones (profile) says:

Re: Re: Re: Using statistics to say what you want...

But the dynamic still doesn’t work both ways though. If I use 500MB, why do I still get charged $25? And how is it non-punitive if I use 2GB + 1MB and I get charge $10 for the 1MB?

att just wants it both ways, they want a continuous revenue stream from the fixed $15/$25 charge but they also want usage charges. Again, if it truly is about unclogging the network and customer value, then charge me true usage, like electricity…2GB at $25 = ~1.2 cents per MB. But they’ll never do that because the average iPhone user pulling down 500MB/month suddenly goes from paying $25/$30 to $6, and att can’t have that.

Derek Kerton (profile) says:

Re: Re: Re:2 Using statistics to say what you want...

“If I use 500MB, why do I still get charged $25? And how is it non-punitive if I use 2GB + 1MB and I get charge $10 for the 1MB? “

Two good questions.

#1: Tiers of service are a compromise between pay per byte metering, like our water meters, and flat rate pricing. As Masnick and Dennis from Techdirt point out, consumers hate “transaction costs” and having to think about whether they should spend a MB or not. Tiered service is designed to allow customers to select a segment they fit in, and pay one predictable price. You seem to prefer a true meter, that’s not necessarily a better model, just different.

#2:You’re right, it is a little crappy to get charged a full GB when you go over by a MB. But that’s what the notification SMSs and web-based usage meters are for. To help people understand their consumption (if they choose to get into the details). Also, it’s way better than the old cellular days when they would hit you with “overage charges” that were HIGHER than your base rate. It was the anti-volume -discount.

Bottom line is that this is an improvement. It’s not perfect for the consumer, and of course AT&T is doing its best to extract as much money as possible. But at least pricing is moving in the right direction: one that respects economics, gives the customer more options, and allows the typical grandma to pay less than the typical iPhone junkie.

Dustin Jones (profile) says:

Re: Re: Re:3 I Agree

“It’s not perfect for the consumer, and of course AT&T is doing its best to extract as much money as possible.”

I agree completely with what you said specifically the above statement. As long as their notification system works as promised these plans are marginally better for those in the 200MB to 2GB range; way better for those less than 200MB. Also, as long as these caps rise with the times too, which we’ll have to wait and see on that one.

My overall point is that while the plans may be better, they’re still actuarial based, meant to maximize profit and minimize consumer backlash. And I think att is being a bit disingenuous in their motivations for these plans.

Dustin Jones (profile) says:


From att’s press release: “Currently, 98 percent of AT&T smartphone customers use less than 2 GB of data a month on average.”

I don’t doubt that, but averaged over what time though? Contract life?

If I use 3GB one month, then .5GB the next, my 2 month average is less than 2GB but att will be more than happy to hit me with an overage charge that first month; of that 98%, what percentage would be hit with overage in at least one month of their contract? I’d bet a large percentage of that 98%.

I have no problem paying for what I use, but it needs to work both ways; if I use significantly less than 2GB in a month, why do I still have to pay $25? Why can’t they do rollover data? Why can’t my data plan be dynamic? e.g. if I use less than 200MB I pay $15 otherwise I pay $25 for data greater than 200MB but less than 2GB? Or some other method? There’s gotta be a better way to do usage billing, and there is but why won’t carriers implement them?

The answer: they won’t make as much money.

bryan (profile) says:

Less investment in network year over year

ATT has major network problems not only because smart phones like the iPhone use more data than regular phones but because ATT has made NO effort to keep up with the demand on the network. Until this year ATT’s spending on it’s network has decreased every year since the original iPhone launched. There is no excuse for that. They may have been surprised by the demands the iPhone placed on the network, but in July they have had 4 years to address the issue. Instead of investing the profits from the services of these data heavy phones back into the networks, ATT has DECREASED their spending on their network.

Derek Kerton (profile) says:

Re: Less investment in network year over year

Last I saw, AT&T will invest $18-19 billion on infrastructure for 2010. That is up from $17 Billion in 2009.

Here’s a source:

Do you guys have a source for your repeating allegations that they are reducing investment? And does it even matter? What if they invested very high in the year after iPhone launch, but diminished it a bit in subsequent years. Isn’t that OK?

Oh. And there’s also that $6.64 Billion dollars that AT&T invested in more spectrum rights in the 700MHz auction in 2008.

Listen, there are lots of reasons to hate AT&T, or your carrier whoever it may be. But you schmoes who keep bitching that “they don’t care” or “they don’t invest” are just speaking blatant falsehoods.

Do they drop calls? Yes. Would we like faster data? Yes. Do they care about network expansion? Hell, yes.

Anonymous Coward says:

Re: Re: Less investment in network year over year

Isn’t it nice that AT&T can now influence the FCC?

DoJ and DoD were nice because of their connections in the previous administration, but being able to influence the FCC is golden because they can now influence the FCC to free up public spectrum for their own use.

Yep. Thanks for the dissertation, Derek. I think I know who you work for now.

Derek Kerton (profile) says:

Re: Re: Re: Less investment in network year over year

“I think I know who you work for now.”

Not really much of a secret, given that I publish the list:

…but AT&T has never hired me. You don’t know what you think you know.

Also, you say, “Isn’t it nice that AT&T can now influence the FCC?” What are you talking about? Telcos have influenced the FCC for a long time. Is your point relevant to this discussion?

Look, people wrote in comments that AT&T doesn’t invest. I argued that these comments were dead wrong, and offered numbers and linked sources. Are you debating me on this, or just rambling like a fool?

Nastybutler77 (profile) says:

Verizon iPhone may change things

It will be interesting to see if/when Verizon gets the iPhone whether they cap their data, and what their pricing will be.

All I know is that with a jailbroken iPhone I’ll be keeping my unlimited data plan, tyvm. I might have my wife’s iPhone switched to one of the capped plans though, if AT&T will let us split them like that. I’ll have to review her data usage.

DABIG says:

Re: That $10,000 Phone Bill

Yes, just received a $10,786 bill. Got the air-card, salesman knew what I was going to use it for (I’m a stock trader). Knew I was going to test it in cities I frequently visit of which I do not have a DSL/Broadband line due to local. Salesman even stated when I asked what the charge will be IF I go over the limit “Oh AT&T will let you know if you get near the limit of which I’m sure you won’t, I haven’t seen one person go over it yet”. Salesman knew I would have numerous tabs open on my MacBook for hours on end; “No problem” he stated. I returned the Air-Card when I returned from a 2 week trip because it wouldn’t work everywhere I went AND I only got 1-2 bars from my home. They told me my bill would be around 105-110 and would come in the mail. Surprise! They’re customer service comment?
You used it regardless of what the Salesman told you. Live and learn right?

Kevin Stapp (profile) says:

$15 screwing

The $15 for 200mb is a royal screwing. I use my iPhone primarily for email and some web browsing (very little video or streaming music) yet I have sucked up 202mb in this billing cycle which ends on 6/22. If a light user such as myself is gobbling up that much data in that short of a period then I can see a lot people getting hammered on their bills.

Bob says:

This is a blatant rip-off!

Consider these three points:

1. At&t suggests that the cap is no big deal because almost everyone uses less than 2GB. So why then would they change the plan to charge less? Does that sound like the at&t that we all no and love? Nuh-uh. No way.

2. The cost of 2GB is less than the cost of the current unlimited plan, but when you add in the price at&t is going to charge for tethering – a feature that is common now – the total cost is more than the current unlimited plan and you still only get 2GB.

3. If you buy 400 minutes of voice from at&t, they don’t charge extra if you use bluetooth to connect a headset. 400 minutes of voice is 400 minutes of voice. With this new data plan, at&t is going to charge you more to use your own usb cable or your own bluetooth connection to connect a device to your phone. EVEN THOUGH THE 2GB OF DATA THAT YOU’VE ALREADY PAID FOR IS STILL ALL YOU GET. If you use your 2GB to watch videos on your phone it cost $25. If you use THE SAME 2GB to watch exactly the same videos on your PC or iPad connected to your phone, at&t feels they need another $20 for that – FOR NO ADDED VALUE. That’s complete and utter bullshit. at&t is within their rights to charge us for data and voice connections on the ‘network’ side of the phone. They have no right to charge us for capabilities on the ‘personal’ side of the phone that they have nothing to do with. THERE IS NO BLOODY WAY I WILL PAY EXTRA FOR TETHERING UNLESS IT COMES WITH MORE DATA, WHICH IN AT&T’S CASE, IT DOES NOT!

Heres’ what I think is really happening:

– Most people use far less than 2GB of data today. At&t has been making a killing on their data plans, even without a cap.

– The combination of tethering and iPads changes everything. Video consumption and file transfer activity will go up a lot. At&t had to put a cap on consumption. This part is easy to understand, even reasonable.

– Instead of implementing a cap and explaining to people – customers – what was behind it, they’re trying to be clever douche bags by applying a cap and raise prices at the same time. The cost for a lot less data plus a charge for tethering – that at&t is not involved in delivering – is 50% greater. If I want to watch a 2GB video on my iPhone, it costs me a $25 plan. If I choose to watch the exact same 2GB video on a tethered laptop or iPad, the cost is $45 – even though AT&T’s network load and involvement is 100% the same. Now THAT’S the at&t that we all know and love.

Jay (profile) says:

The logic defies me...

I read the story on a different site. And AT&T was quoted as saying “their customers barely used the unlimited plan” which truly boggles the mind when you think about how many people are on Twitter, Youtube, and other places that consume massive amounts of data for the little thing.

Personally, rather than limiting it (which has effectively killed my aspirations as a customer) I would think they would expand their network to fix the problem and not remain stagnant. Now, Verizon or even T-Mobile have a chance to take the #1 spot that AT&T currently enjoys.

Anonymous Coward says:

Using statistics to say what you want...

Isn’t it nice that AT&T can now influence the FCC?

DoJ and DoD were nice because of their connections in the previous administration, but being able to influence the FCC is golden, and you are the winner.

Yep. Thanks for the CTIA dissertation, Derek. I think I know who you work for.

It’s also nice to see that AT&T is sitting on a fat pile of cash that came from squeezing employees’ healthcare benefits over the past 4 years.

You’re an amazing man, Derek. Ever think of getting into PR? Seems right up your alley. You don’t know these people until they move into your house.

Derek Kerton (profile) says:

Re: Using statistics to say what you want...

Some people made a point in these comments. They said AT&T doesn’t invest in the network.

I argued this as wrong and showed the evidence.

I invite you to argue back sometime, if you have something of value to bring. Do you understand that merely (incorrectly) saying I’m in AT&T’s pocket isn’t actually refuting any point I made?

(And where are those free research reports you promised a few weeks ago?)

Corey Gardner says:

Very Upset!

I am currently an AT&T customer and was very very PISSED when I found out about this. They have the best phone on the market how could they expect not to have high volumes??!!!? They need to get their shit together and give us back our unlimited data this is redic! I think we should protest! This is absolutely pitiful current Unlimited Data users should be able to keep their plans until they’re ready to give it up. Even on the iPad its especially meant for data I mean get real AT&T your going to crash and burn even with that new iPhone sorry guys but Fuck Off.

Nate (profile) says:

I’m in a networks class having to write a paper about the problems with the wireless service. Part of that is the exploration of the AT&T data plan change. Turns out it’s a fairly necessary change AT&T had to make to improve the quality of service for its customers (or I suppose make the network easier to maintain). Plus if you believe the numbers that AT&T spewed in its press release that 98% of its users fell under the 2Gb cap, then the change is really not that big of a deal. Power users will move over to the other providers and hinder network performance there.

Perhaps as 4G rolls out it will alleviate some of the congestion and caps won’t have to be made. I’m counting on femtocells to be a popular choice because they’ll dump wireless data straight to wire and back.

Also, adding more towers is not a simple process. It’s one that creates NIMBYism.

Jason Jacquinto says:


How do you offer half of your customers unlimited plan and the other half these other 2 crap options. It is not fair to have different options for different customers. Also, I believe it is a ploy to get people to have overages on their phone bill. When I bought the iphone I was told 2 gigs of data is plenty. However, the first week I went over my two gigs one and then the next week the same. My last phone bill was 200 dollars. The I called at&t to ask how I can track my gigs and they told me there is no way. I asked them how many megabits or terabits it is to go to Google (one of the most common sites) and they had no clue. Great customer service at&t. I guess we all suffer because your servers are weak and do not have enough coverage! One day someone el;se will have the iphone and I will be switching to a better provider then at&t.. I MISS SPRINT!

LN says:


I think AT&T’s new data plan is stupid. AT&T should offer everyone an unlimited plan if they choose to pay more. It is so hard to keep track of how much data you have used in a whole month…i am considering leaving AT&T to go to either Sprint or Verizon due to better service and data plans. I am extremely disappointed with AT&T and I really don’t like them anymore.

Chris says:


Well even though I am a old AT&T user I have my iPhone and since the smart phones are constantly connected to AT&Ts data network they had to cut back cuse really almost every phone in the world are now smart phones besides like trow away and no contract phones but of the gave every smart phone they had unlimited data like I still have they would only make the money they get off ur bill and the charges for new contracts and there phones witch wouldn’t leave much for any phone company to gain a profit u have to see that and I know that AT&T don’t get great survice every where but atleast I know I’ll go over the 4GB plan they have even though I’d like myfi I feel better having my unlimited data

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