The Week with Roger
This Week: AT&T’s OneConnect Plan
Why It Matters
The OneConnect bundles illustrate how legacy telcos are using converged, all‑inclusive pricing to win back broadband customers from cable competitors, a trend that could reshape the U.S. telecom market. For consumers, the plans promise simpler billing and potentially lower costs, while investors should watch AT&T’s churn and revenue trends as the company pivots to bundle‑centric growth.
Key Takeaways
- •AT&T launches OneConnect with three tiered bundles.
- •Plans combine unlimited fiber, mobile lines, and device allowances.
- •Pricing undercuts cable competitors, includes taxes and fees.
- •Strategy targets new fiber customers, may boost churn short‑term.
- •Bundling shifts focus from ARPU to overall revenue growth.
Pulse Analysis
AT&T’s new OneConnect plan arrives in three distinct tiers—Individual at $90, Duo at $120, and Family at $225. Each tier bundles a single voice line (or multiple lines for Duo and Family), up to a gigabit of fiber, and a flexible device allowance that can cover watches, tablets, or hotspots. The offering is limited to new customers inside AT&T’s expanding fiber footprint, positioning the company to capture households ready to upgrade from legacy copper or satellite services. By bundling mobile and broadband under one flat fee, AT&T mirrors the simplicity that made its fiber‑only plans popular.
The pricing structure directly challenges cable operators, delivering comparable broadband speeds and multiple wireless lines at a lower, all‑inclusive rate that already incorporates taxes and fees. This mirrors the “cable‑killer” playbooks seen from competitors, but AT&T adds a convergence twist by allowing up to 20 total devices on the Family tier. Analysts note the move signals a shift away from traditional ARPU metrics toward an ARPA (average revenue per account) mindset, where the focus is on total household spend rather than per‑line revenue. The plan also hints at future expansion into fixed‑wireless access (FWA), which could further erode cable market share.
From a strategic perspective, OneConnect is a revenue‑driven response to recent price hikes on legacy plans and a tool to reduce churn among bundled customers. While the aggressive pricing may spark short‑term churn among existing non‑fiber users, the bundled nature historically lowers churn for multi‑line households. Management’s compensation tied to revenue rather than churn suggests the plan is designed to close gaps in EBITDA and sustain long‑term profitability. As AT&T’s first major plan overhaul in 24 years, OneConnect could set a new industry benchmark for integrated telecom offerings.
Episode Description
Analysts Don Kellogg and Roger Entner evaluate AT&T’s new OneConnect plan, examining its impact on both consumer value and the competitive landscape, as well as new price increases for existing subscribers.
00:00 Episode intro
00:26 New OneConnect plan overview
04:01 ARPU is waning as a metric
04:30 AT&T's strategy with the plan
05:23 Price increases on existing customers
06:21 Will price hikes backfire?
07:54 The company remains focused on the long term
08:33 Episode wrap-up
Tags: telecom, telecommunications, wireless, prepaid, postpaid, cellular phone, Don Kellogg, Roger Entner, AT&T, OneConnect, convergence, fiber, cable, FWA, ARPU, ARPA, T-Mobile, bundling, price increases, churn, revenue, EBITDA
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