AT&T launched its own prepaid arm today called Aio Wireless. It's sort of like Boost is to Sprint - AT&T owns Aio, but Aio is sort of its own company - so it's easiest to think of it like an MVNO (Straight Talk, NET10, Virgin Mobile, etc.). Here's what you need to know about Aio, and how it differs from other MVNO providers using AT&T's network, like Straight Talk.

  • Aio is being rolled out on a trial basis, and for now subscribers must have a billing address in Houston, TX, or Tampa / Orlando, FL. The list of cities will grow over the next year [... if AT&T deems it a success]. Coverage, however, is nationwide, and includes the entire AT&T 3G footprint.
  • Like Straight Talk / NET10, Aio uses AT&T's 3G HSPA+ network to provide customers prepaid smartphone service. It does not utilize LTE, and it sounds like it won't any time soon. LTE is being reserved as a premium AT&T experience.
  • Unlike Straight Talk or NET10, Aio caps the maximum speed of its 3G data service at 4Mbps. By contrast, AT&T's unthrottled HSPA+ network can achieve speeds in excess of 10Mbps in ideal conditions. In congested metro areas, though, 4Mbps can be well above what you'll usually get.
  • Obviously, you can use any compatible smartphone you want.
  • Tethering is expressly forbidden by Aio's terms of service, and can result in cancellation of your service.
  • Aio also makes it pretty clear that excessive, continuous  bandwidth consumption may result in throttling, similar to Straight Talk and NET10. So, don't expect to go on too many hours-long Netflix / Hulu Plus binges over 3G.
  • There are two smartphone plans: Aio Smart and Aio Pro. The only difference between plans is the monthly data cap - both have unlimited talk and text, including MMS.
    • Aio Smart: Unlimited talk and text, 2GB of data before throttling. $55 / month.
    • Aio Pro: Unlimited talk and text, 7GB of data before throttling. $70 / month.
  • Both plans can be topped up with an extra gigabyte of regular-speed (4Mbps max) data for $10 more a month, as a one-time or recurring purchase.
  • There's a separate plan for tablets that includes 250MB of data and costs $15 / month.
  • Aio has a really nifty account management app that makes me insanely jealous as an AT&T customer.
  • Aio's mascot is a Penguin shaped like an "a".

Aio is actually a pretty attractive option if you live in an area where T-Mobile service sucks (assuming Aio comes to your area eventually), but until it rolls out on a wider basis, this is pretty clearly just a big experiment for AT&T in the prepaid space. The goal here, obviously, is to compete not just with MVNOs, but pricing at Sprint and T-Mobile. The major advantage to AIO versus T-Mobile or Sprint is, for the time being, coverage. Sprint and T-Mobile's national coverage maps are pretty sparse compared to Ma Bell's, and unless you can dig up an ever-more elusive AT&T Straight Talk SIM, getting AT&T data on the cheap is getting harder.

Is the pricing as competitive as it could be? Of course not - AT&T is positioning these plans below its regular non-shared data smartphone service rates pretty strategically, and it sounds like we may finally have an explanation for the on-the-rocks Straight Talk / NET10 relationship. Likely, AT&T wants to force the two MVNOs to either institute tougher data caps or increase prices before it'll renew its agreement with their parent company, something that's already happened at NET10.

So, it's not that Aio will undercut Straight Talk, that much is clear. But it's all too easy to put two and two together on the strained relationship AT&T has had with its two biggest MVNOs of late, and how it may strongarm consumers into Aio's profitable embrace. We'll see how it plays out in the coming year.

Aio Wireless