• Carrier cuts price on big data plans; small users to pay more
  • New prices precede introduction of Apple iPhone next month

AT&T Inc., the only U.S. wireless carrier still charging customers when they exceed data limits, has finally bowed to industry trends and is dropping the levies in a sign that competition for new customers is growing more challenging.

Starting Sunday, AT&T customers can select plans that will instead cut their connection speeds when their web surfing or video streaming approaches a monthly cap, according to a company statement. Previously, the extra charges were as much as $15 per gigabyte.

While that sounds like a formula for angering fans of Netflix Inc.’s “House of Cards,” the No. 2 U.S. wireless carrier is actually following competitors in trying to woo customers by ending overage fees and offering savings on larger data plans so videos aren’t interrupted. T-Mobile US Inc. has gained more than 7 million monthly subscribers over the past two years with low prices and features like free video streaming and no overages.

Under the new plans, AT&T is raising prices for smaller data allotments while lowering them for large data plans. The new offers start at $30 for 1 gigabyte of data, compared with $30 for 2 gigabytes on the previous plan. Larger data blocks like 30 gigabytes will be $135 a month, compared with $225 under the old plan.

One gigabyte is enough to stream about an hour of high-definition video, according to data from Dallas-based AT&T.

Verizon replaced its overage charges last month with reduced internet speeds. At the same time the company bumped up data allotments on its family plans.

The carriers are introducing the price plans ahead of the arrival of Apple Inc.’s new iPhone next month. Traditionally, the latest phone from Apple, combined with the holiday season is biggest period of subscriber gains for the carriers.

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