AT&T Adds Prepay Data and Messaging - So What?

Implications: Why did it take AT&T so long? Billing should not be rocket science. The demand for prepay voice is well proven, SMS has been a winner for a long time; data is the biggest unknown, but MMS (photo and media) messaging could be a driver to push data volumes, but the price seems high.

Analysis: Prepay voice calls, a hallmark of much of the developing world and a strong way to provide wireless phone users a way to control their costs, have been around for a long time now. The fact that AT&T has finally figured out a way to do the same with wireless data and SMS/MMS only means that they must have fired their old billing staff and hired someone from Google!

SMS sells. It's easy to create and send a message, there's a whole subculture of codes and ciphers that compress more complex phrases into a few symbols, and it's pretty cool. There are a billion uses for it. This is a moneymaker but you've got to wonder why it took so long.

Data is more of an unknown, especially at the price that AT&T has proposed. While MediaNet is better sculpted to smaller size pages with little graphics, the Internet is a wild and woolly place, not well suited to the small screen of the handset nor the high cost of delivery. MMS may be able to drive some data volume, if it can be made easier especially in simple handsets to send snapshots or media snips. To date, this hasn't done well, perhaps partially because the process is still not well supported and a given handset may or may not support it properly. It remains to be seen whether there's much money to be made there.

I think the biggest sotto voce here is that AT&T is recognizing that there's an entire (and large) subclass of consumer who is ether unable to get the credit necessary to have access to the contract, is unwilling to sign up for a contract, or wants a very firm grip on the cost of service. This is a required culture-shift to partake in this cream along with the MVNOs who have been successfully addressing this market for a long time.

The fact that AT&T is now offering this seems like a non-news event, something akin to McDonald's now offering takeout food rather than just dine-in. But, it does represent a significant benefit to the growing army of prepay users to gain access to services that the rest of us have taken for granted.