AT&T targets prepaid sector with launch of Aio Wireless

AT&T seems determined to address its shortcomings in the US prepaid market, having unveiled a new brand called Aio Wireless for customers who want to avoid signing up to long-term contracts.

Announcing the availability of the service in selected stores across Houston, Orlando and Tampa, the operator said it expected to introduce the service in “multiple markets across the US over the next year”.

AT&T seems determined to address its shortcomings in the US prepaid market, having unveiled a new brand called Aio Wireless for customers who want to avoid signing up to long-term contracts.

Announcing the availability of the service in selected stores across Houston, Orlando and Tampa, the operator said it expected to introduce the service in “multiple markets across the US over the next year”.

“We talked with no-annual-contract customers and created our service around what they want,” said Jennifer Van Buskirk, the new president of Aio Wireless. “We are set to win over value-conscious customers who are increasingly moving towards smartphones and mobile broadband.”

Aio comes with three simple rate plans, says AT&T (Dallas, TX, USA), with prices ranging from $35 to $70 a month.

Devices will be available from a range of manufacturers, including Samsung (Seoul, South Korea), Nokia (Helsinki, Finland), ZTE (Shenzhen, China) and others, but customers will also be able to bring unlocked phones with them from other providers.

The details suggest Aio Wireless is a direct response to recent moves made by T-Mobile USA (Bellevue, WA, USA), which has upped the stakes with its launch of low-cost smartphone tariffs that do not include device discounts.

For a start, the prices unveiled by Aio Wireless are very similar to those marketed by T-Mobile.

Despite its difficulties in the higher-value contract segment, T-Mobile continues to flourish in the prepaid market, growing its business from 5.1 million to 6 million prepaid customers between March 2012 and March 2013.

By contrast, AT&T’s prepaid business shrank from 7.4 million to 7.1 million customers over the same period.

The decline is in marked contract to developments in the contract segment, where AT&T’s customer base grew from 69.4 million to 70.7 million and T-Mobile’s shrank from 21.9 million to 20.1 million.

T-Mobile, however, is expected to become a more vigorous competitor in the contract segment following its takeover of MetroPCS (Richardson, TX, USA), which was completed at the beginning of May.