This AT&T Announcement Should Attract iPhone Prepaid Customers in Droves

Must be nice having people fight over you. Apple (NASDAQ: AAPL [FREE Stock Trend Analysis]) is used to that, though, but another battle is about to get underway and this time it’s in the prepaid phone market.



With the price of contract plans feeling a lot like the typical cable bill, consumers continue to look for options that are cheaper, a la carte, and don’t lock them into a contract. (You know, the same thing consumers demand from their cable provider but don't get.)
Prepaid phones are the carriers’ answer to that demand but up until recently, they’ve been a little archaic. 10 cents for each text message?
On Thursday, MacRumors reported that AT&T’s (NYSE: T) GoPhone prepaid wireless plan will expand. First, it will include support for AT&T’s LTE and HSPA+ networks. This upgrade allows for the second big piece of news: full support for the iPhone. AT&T is expected to announce the expanded service on Friday.
AT&T has always supported the iPhone as part of its GoPhone plan but since the service didn’t provide for any data service, the iPhone was nothing more than a really expensive cell phone that was overqualified for the job.
On June 21, pre-existing iPhone customers will receive data support or they can manually upgrade before that time.
Why would AT&T want to expand the use of the iPhone on its GoPhone network? Presumably, because the iPhone is making giant inroads into the prepaid market. Cricket paved the way a year ago and now, Sprint’s (NYSE: S) Virgin Mobile brand and other AT&T prepaid brands already carry it. Sprint’s prepaid brand, Boost Mobile is also rumored to be launching it in the near future. As an increasing amount of iPhones are retired for newer models, the market for used phones at a fraction of the price of new models is increasing.
AT&T has underperformed the market in the last six months. The stock is up about 7 percent since late November although it’s a favorite of value investors who enjoy the 4.8 percent dividend yield. Technically, the stock is showing bearish flags. It’s well under its 50 day moving average, sell volume is significantly higher than buy volume, and RSI is around 42.
The stock is off of its April highs of about $39 and still has a lot of downside before it reaches strong support around $35.75.

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AT&T GoPhone To Update Pre-Paid Service With 4G LTE, HSPA+ Tomorrow




According to MacRumors, AT&T is expected to improve its GoPhone prepaid wireless brand tomorrow, rolling out LTE and HSPA+ data network access and official support for the iPhone. GoPhone customers who have been using the service with an iPhone or compatible 4G device will now be able access data service on their devices.  GoPhone will reportedly be offering three different service plans for the iPhone and other 4G capable devices, starting with a plan that includes unlimited texts and calls and 1 GB of data for $65 a month. Also available will be plans starting at $25 and $50, with data packages being available for an additional charge. GoPhone is allowing customers with off-contract iPhones and 4G smartphones to join the pre-paid service, or purchase an iPhone in AT&T retail stores at for the full non-commitment price. Existing smartphone users with GoPhone service will automatically receive cellular data support on June 21st.
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AT&T launches Aio Wireless, a new prepaid brand

AT&T is launching a new brand, Aio (pronounced “A-O”) Wireless, a data-centric prepaid wireless service that AT&T says will provide "a first-class wireless experience at a value price, without an annual contract." Aio will run on AT&T's network but will not have access to its highest-speed LTE network, meaning that while customers may be getting unlimited data, they may have to be a little patient when downloading large files. Network speed isn't as much of a factor in text and voice communications. So is Aio a response to T-Mobile's recent removal of long-term contracts from some of its service brands? AT&T says it's not. “We talked with no-annual-contract customers and created our service around what they want. They want simple, easy plan choices with unlimited offers; first-class service at affordable prices; great devices; nationwide voice and data coverage; and no annual contracts. Today’s wireless customers don't want to compromise,” said Jennifer Van Buskirk, president of Aio Wireless. “We are set up to win over value-conscious customers who are increasingly moving towards smartphones and mobile broadband.”
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