AT&T Targets $50 Unlimited Plan at Ultra-Competitive Prepaid Cell Market

Unlimited data plans for smartphones may be headed for extinction at many traditional carriers, but they are making a comeback in the cost-sensitive prepaid market.

AT&T became the latest to join the fray on Tuesday, introducing a new $50-per-month plan that covers unlimited talk, text and Web for prepaid phones using its GoPhone service. There is a catch, however. Unlimited Web is only available on feature phones, not on the kinds of smartphones that can really start sucking down data.

The move is designed to help AT&T better compete in the prepaid market, which features low-cost plans from Sprint’s Boost Mobile and Virgin Mobile brands, as well as from smaller players such as Leap’s Cricket and Metro PCS.

With prepaid plans, phone buyers pay full price for their device, but with that they get the luxury of not having to sign a contract. And while prepaid plans once cost far more than traditional ones, such services are now often the cheapest game in town.

Boost Mobile, for example, offers plans that start at $50 a month ($60 for BlackBerry devices), with the additional perk of a $5 drop in price for every six months that a user pays on time — up to a maximum savings of $15 a month.

Metro PCS, meanwhile, offers a $60-a-month unlimited plan that is available in conjunction with an Android smartphone, the Samsung Galaxy Indulge.