AT&T today announced that it will resurrect the Rollover concept it pioneered in the days when voice minutes dominated wireless service with Rollover Data. The comment below may be attributed to Jan Dawson, Chief Analyst, Jackdaw Research. Jan is also available for further comment via email at jan@jackdawresearch.com.
AT&T’s announcement will be seen as a response to T-Mobile’s Data Stash announcement from just before Christmas, but in reality it has been in the works and under discussion at AT&T for quite some time. Given that AT&T pioneered the concept of Rollover Minutes, it’s natural that it would want to own the concept and the brand in the data world too. AT&T’s version differs significantly from T-Mobile’s version. It’s less generous, with a single month of rollover rather than twelve months, but that should make it both easier for customers to keep track of and more manageable from a network load perspective. T-Mobile’s plan risks creating a situation similar to airline miles, where customers have a hard time keeping track of which miles (or Gigabytes of data) expire when. AT&T’s version also better mirrors the original concept, which was designed to give customers some flexibility about month-to-month usage rather than allowing them to accrue substantial unused allowances over time. But T-Mobile (and John Legere) will undoubtedly beat AT&T up about the perceived inferiority of its offer.
All of this is part of the broader escalation in the competition between the US wireless carriers that’s occurred in recent months. And as with previous moves, it’s focused on larger data allowances, which carriers have the flexibility to offer without occurring significant costs or reducing prices directly. It’s relatively low-risk for AT&T to offer, especially given the one-month limit, and fits well with its branding and history, so it should resonate with consumers. It will also increase pressure on Verizon to offer a similar deal, though Verizon has resisted recent moves to a greater extent than competitors, preferring to target discounts at individual users it considers at risk rather than sweeping discounts or widely-available offers. However, as all four major networks reach rough parity in LTE coverage over the next year or so, competition around offers and pricing will continue to intensify as a major source of differentiation, and Verizon will find it increasingly difficult to resist these moves.