AT&T followed T-Mobile’s lead today by rolling out some new service plans that eschew traditional two-year contracts, as my colleagues Alex Colon and Kevin Fitchard reported this morning. AT&T Next, as the effort is branded, essentially saves customers $15 a month when they either A) pay full retail price rather than buying a subsidized phone, B) activate their own phone on the network or C) complete their existing contracts and switch to the new plans on the same phone.
Sascha Segan over at PCMag.com astutely noted that the move shows that regulated competition works for consumers. AT&T was blocked from acquiring T-Mobile two years ago, Segan wrote, and T-Mobile’s bold move to dump contracts and handset subsidies is forcing its bigger competitors to react. That kind of disruption is increasing thanks in part to a small army of new MVNOs like FreedomPop and Republic Wireless, which lean on Wi-Fi to provide highly discounted services. And because all four tier-one carriers in the U.S. are likely to sit out next month’s spectrum auction, as The Wall Street Journal reported earlier this week, those airwaves are likely to be won by Dish Network or an existing regional carrier. Which would only serve to increase competition and benefit consumers even more.