May 9 (Bloomberg) -- AT&T Inc. created a pay-as-you-go unit called Aio Wireless LLC that offers service with no annual contract as the second largest U.S. wireless carrier works to compete with T-mobile US Inc. to win budget-conscious customers.
Aio Wireless, based in Alpharetta, Georgia and will sell a range of phones including Apple Inc.’s iPhone with data plans from $35 to $70 a month, the company said today.
With Aio Wireless, AT&T will challenge T-mobile, which in March announced a value service plan starting at $50 a month for smartphones with an installment payment option on the devices. Aio Wireless, which doesn’t offer faster long-term evolution service, will begin sales today in Houston and Florida cities including Orlando and Tampa, according to a statement today.
“Aio was conceived long before we saw other offerings in the market,” Jennifer Van Buskirk, president of Aio Wireless, said in an interview. “We are offering this service to people who feel their needs aren’t being met. They want more data, they are moving to smartphones and social media, and they’ve had limited choices.”
Customers can buy phones on an installment plan, said Buskirk, who didn’t name the financing service. Aio Wireless plans to offer service nationally and open new stores, she said, adding that more markets will be announced in the coming months.
AT&T, based in Dallas, fell 1.3 percent to $37.33 at the close in New York.
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