AT&T Mobility says it will roll out its new Aio prepaid service nationwide next month. Aio offers three plans, ranging in price from $40 to $70 per month. All offer unlimited talk, text and data, but the amount of 4G LTE data is limited. Customers can bring their own phones or buy a new one to use with the plan — a new phone will cost full price because carriers do not subsidize prepaid phones. A 32-gigabyte iPhone 5, for example, is $800 without a subsidy.
The Aio brand is separate from AT&T’s GoPhone offering, which is also a prepaid plan. AT&T has blamed slowing GoPhone sales for a decline in its prepaid customer base. The nation’s second largest carrier has been losing prepaid customers to T-Mobile US and Sprint. It lost 184,000 prepaid customers during the first quarter, and gained 11,000 in the secon quarter.
Carriers are increasingly focused on the prepaid market, as more wireless customers eschew contracts in favor of less expensive plans that allow more frequent upgrades. The nation’s largest carriers have tried recently to have it both ways, offering contract plans that allow subscribers to upgrade their devices more frequently. AT&T’s Next plan, T-Mobile’s Jump, and Verizon’s Edge all give subscribers the chance to upgrade faster than they could with a traditional 20-24 month contract.
AT&T will also be addressing the prepaid market through the Cricket brand once it completes its planned purchase of Cricket parent Leap Wireless. The company has said that once the acquisition is complete Cricket customers will enjoy access to AT&T’s network.
Aio had already launched when AT&T announced its decision to buy the Cricket brand, and AT&T clearly believes the prepaid market is big enough to support both brands. It has created a distinct marketing campaign for Aio, and this week T-Mobile sued AT&T over Aio’s use of the color magenta in that campaign, saying it “is likely to dilute T-Mobile’s famous magenta color trademark.”
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