The carrier, which had charged $25 a month for 2GB of data, will now offer 3GB for $30 a month. Its entry-level data plan, which was $15 for 200 megabytes, will shift to $20 for 300MB, while its $45 high-end 4GB plan (which allows tethering to another device) will now be $50 for 5GB.

Existing customers will be able to keep their current data plan, even if they upgrade their phones, but can also opt to switch to one of the new plans.

AT&T says the change reflects the ever-increasing amounts of data that customers are consuming, noting that data usage is up 40 percent in the past year. The company expects data use to continue to rise as the carrier offers its new high-speed LTE network in more cities.

AT&T’s primary rival, Verizon, charges $30 for 2GB of data, though it has been running a “double your data” promotion offering 4G customers 4GB of data for that price.

Customers, meanwhile, are still trying to get a handle on just how much data they are using, now that most of the major carriers have moved away from fully unlimited plans.

Sprint still offers unlimited plans on phones, while Verizon and AT&T have tiered plans with overage charges and T-Mobile throttles the speed of users once they hit a certain level of paid data use.

While most of the world’s largest cellphone makers are household names, there’s a pretty good chance that you have never heard of the company at No. 4 on the list.

In part, that’s because ZTE is best known for the phones it sells in China, its home market. In recent years, though, ZTE has begun to make inroads in the U.S. Its progress, however, has been largely invisible to consumers.

ZTE’s phones and hotspots tend to bear the brand of the carriers selling them, rather than its own, but the company said that, in time, it expects to see its name out there more.

“We understand the U.S. market is primarily a market driven by the carriers,” ZTE U.S. CEO Lixin Cheng said in an interview at last week’s Consumer Electronics Show. “Compared with some of our competitors, we are more willing to customize our product.”

In 2011, the company debuted a number of new products, including the Chorus phone for Cricket, and the Android-based Avail smartphone for AT&T.

So far this year, ZTE has introduced just one product — a hotspot for Verizon. In the coming months, though, ZTE plans a number of products for the U.S., including several for fast new LTE data networks.

“We will launch an LTE smartphone, tablet and mobile hotspot, and other data products in the United States,” Cheng said. “That’s our strategy this year.”

The company also plans to support both Android and Windows Phone smartphones, with plans on tap to launch a Microsoft-powered smartphone in the U.S. this year.

“We will make sure we have a wide competence in-house to support both operating systems,” said Cheng, who noted that Microsoft is a key partner for his company for its current “Mango” version of Windows Phone, as well as for its upcoming “Tango” low-end effort. ZTE is also interested in what Microsoft has in store with Windows 8.

ZTE began life in 1998 as an effort to bring telephony to more of rural China.

Cheng said the company sees a similar opportunity in the U.S., where smartphones are still either pricey or tied to expensive contracts.

As has been a challenge for fellow Chinese networking-device maker Huawei, some have raised questions over whether ZTE’s products — particularly networking gear — pose security risks.

Cheng rebuffs such concerns, noting that the company is publicly traded, with a largely independent board. And as for the security of its networks, Cheng notes that ZTE is already the key infrastructure provider behind Gogo’s inflight Wi-Fi.

“Our company’s values (are) very comparable with America’s values,” he said.

So just what is he going to do?

Well, some of the details are still being worked out. But Humm said a big part will be continuing with the “value plans” that the company introduced last year. Those plans, which offer lower monthly rates to those who forego a device subsidy, can indeed save many customers money, but they are also complicated to make sense of.

“I think it’s more complicated because it means you separate out the handset from the rate plan,” Humm said. “On the other hand, it is more honest. It is a way for customers to optimize based on what they need.”

Humm notes that some customers want a big data plan but don’t need the latest smartphone, while others want the latest phone but not a lot of data. T-Mobile’s value plans ensure neither will overpay.

T-Mobile also intends to stick with plans that slow users down after they hit the amount of data they have paid for, rather than implementing an overage charge.

“What customers hate is when they are using data and suddenly they are being cut off or they have to pay gigantic overages,” Humm said. “Our model doesn’t do that. You stay connected and you don’t have to pay more.”

And while other carriers struggle to figure out a way to allow customers to share gigabytes across multiple devices, Humm said T-Mobile is sticking with an approach that allows customers to add a discounted second rate plan.

When it comes to getting the latest devices, Humm insists that isn’t a problem despite his No. 4 market position and the fact that the company uses a rather unique wireless band.

Of course, there is one big exception: The iPhone.

All of the other major U.S. carriers — AT&T, Verizon and Sprint — now carry the Apple device, leaving Humm odd man out.

He isn’t giving up hope, though.

“The key reason we didn’t have the iPhone in the past is we are on different band than globally the market was,” Humm said. “That is something which will change over time. Chipsets are also evolving to be able to allow for more bands.”

As always, though, the decision is up to Apple, Humm acknowledges.

On the marketing front, Humm said that T-Mobile will probably resume the approach it had been taking prior to the AT&T deal, in which it sharply attacked its rivals and pitched itself as a more consumer-friendly alternative.

“We will pick up our challenger strategy the way we had presented it last year and sharpen it further,” he said.

Long-term, the company still has to figure out what it is going to do about a next-generation network. Verizon, AT&T and Sprint have all either launched an LTE network or plan to do so this year.

Because of spectrum limitations, T-Mobile has focused instead on speeding up its existing HSPA+ network, which it also bills as “4G.” For now, Humm insists that is good enough, saying customers care more about reliability and speed than they do network technology.

The real benefit of LTE, Humm said, is on easing network congestion, and he notes that isn’t a problem T-Mobile currently is struggling with.

“LTE has the advantage on the long haul; it is more effective spectrum ultilization,” Humm said. “That’s only something which will help (over) the long haul. You are talking about maybe in three, four, five years.”

LTE is still the long-term plan, Humm said, adding that he thinks the company will find a way to get the spectrum it needs.

“We’re not against LTE,” Humm said. “We will over time evolve to LTE. We just don’t see a need to move there very fast.”

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The company kicked off 2012 by announcing six new Android devices, all running on LTE, as well as new LTE-capable Windows phones from HTC and Nokia.

Moments after he left the stage, AT&T Mobility CEO Ralph de la Vega sat down with AllThingsD to talk about a wide range of issues facing his company, various mobile device makers and the industry as a whole.

Here’s an edited look at what he had to say.

On the failure of the T-Mobile deal and where AT&T goes from here:

We’re very pleased that the FCC approved our purchase of the Qualcomm spectrum. We’ll be working to put that into play as quickly as possible. And we are always going to be on the lookout for new spectrum that comes on the market. We hope that the FCC also makes more spectrum available.

We’ve put that behind us and we are moving on to have a great 2012.

On BlackBerry maker Research In Motion, which was notably missing from AT&T’s announcement on Monday:

BlackBerry has got some interesting things coming up. I’m encouraged by some of the things that I understand they are bringing to market.

BlackBerry has been a great partner and, you know, people love their devices. They love the keyboards. I think they are working on all of the things customers want. I am very pleased with, at least, the things that are on their roadmap. As soon as they can get them I think they are going to have a lot of customers knocking on their door.

On Motorola, which was also absent from AT&T’s Vegas announcements:

They are going to have some exciting stuff. They are just not ready to announce them with us. It’s really early in the year.

On Sony’s future in the smartphone market:

As you know, they bought out the Ericsson interest. I think they are going to have a more focused approach and put what I call more “Sony-ness” into their smartphones. We’ve met with their team and I am very encouraged.

On whether AT&T will offer fewer tablets this year after so many iPad rivals failed to make a dent in the market:

I think you are going to see us find models that have a particular differentiated approach to the tablet market. Obviously Apple sets the bar with the iPad, so Pantech is now looking at a very low-end device, still a great device, but I think that kind of distinction is what customers want.

On why the 5.3-inch Samsung Galaxy Note might stand a chance:

That’s the first hybrid device that tries to fill in a niche between a tablet and a smartphone. I’ve been using that device and it is, surprisingly, an amazing device. I didn’t understand whether we were going to be able to make that transition work, but you ought to try it. I think you will get hooked on it.

I think it is for somebody that wants to make it their primary device and doesn’t want to carry around a tablet as well. It’s surprisingly thin. It fits in your pocket.

That’s an iconic device. It’s exclusive to us. We’re going to put a lot of marketing effort behind it.

On whether we will see LTE phones that work across multiple carriers even though the first devices don’t support that.

The first ones are done that way because of technology limitations. How many antennas can you squeeze into one of those things? It’s the first generation. As the technology matures, you will incorporate more bands into the devices. I think you will have as many bands as customers are going to want. It’s not inexpensive, but I think technology will allow us to do that at a reasonable price.

Also getting the service are Austin; Chapel Hill, N.C.; Orlando; Phoenix; Raleigh, N.C.; and San Diego, Calif.

That’s in addition to the 15 other markets in which AT&T launched LTE last year. Of course, AT&T still trails Verizon, which has coverage in 190 markets, with service available to more than 200 million people.

Sprint, meanwhile, has much of the country covered with an alternate 4G technology, WiMax. However, Sprint has announced plans to launch an LTE network of its own later this year.

Constrained by spectrum, T-Mobile USA has focused on rolling out ever-faster variants of its 3G network. The company had hoped a merger with AT&T would solve its problems, but is now scrambling for other options since that deal collapsed.

Update, 1 p.m.: In a Twitter posting, Sprint noted on Wednesday that it plans to launch its LTE service in Atlanta, Dallas, Houston and San Antonio by mid-year.

I really can’t say if I like this video or I am completely freaked out by it.

T-Mobile, which didn’t get sold to AT&T, hired Hollywood director Alfonso Gomez-Rejon and “surprised” shoppers at the Chicago area’s Woodfield Mall with a flash-mob performance of “(There’s No Place Like) Home For The Holidays.”

It’s like the gals from television’s “Glee” cloned themselves and went wild, while stealing a 1980s look from the classic teen movie “Pretty in Pink.”

Except even stranger and up to more than four million views on YouTube.

Now, who knows what the mobile carrier will do next with all those billions from the scotched takeover deal? An unholy combo of HBO’s “Boardwalk Empire” with the even more grating kid’s film I barely endured, “Alvin and the Chipmunks: Chipwrecked”?

Until we find out, enjoy, and then please get back to work tomorrow, everyone:

The wireless company said on its Web site earlier today that the fee will go toward costs incurred by processing individual online or phone payments — in other words, actual customer service representatives handling telephone transactions.

Verizon did not immediately respond to a request for comment, or to an inquiry about how many of its customers currently pay their bills online or over the phone.

One fed-up user has already launched a fledgling petition drive aimed at getting Verizon to reverse course.

Sprint does not currently charge its customers to pay bills online, though it notes, as other wireless providers do, that if you pay through your bank, you could incur charges from that financial institution. AT&T also doesn’t charge customers for monthly online bill payments, nor does T-Mobile, though T-Mobile notes that certain types of accounts, such as T-Mobile Monthly4G (prepaid) and certain business and government accounts, aren’t eligible for paperless payment. T-Mobile customers are actually encouraged to make online payments, as they’re charged a $5 processing fee for payments made over the phone through a customer service representative.

(Image courtesy of EMay78/Flickr)

Networks that use the GSM standard are vulnerable because of the way in which they handle commands, German researcher Karsten Nohl told AllThingsD on Monday. GSM networks are common throughout the world and are used in the U.S. by AT&T and T-Mobile USA

Nohl’s studies were reported earlier by the New York Times.

Nohl, who is presenting his research in Germany on Tuesday, studied 11 countries and was able to hack into both voice and text conversations, using a seven-year-old Motorola phone along with widely available decryption software, according to the Times report.

At the heart of the vulnerability is the fact that network commands are sent in the simplest of computer code, basically amounting to a message like “I have a call for you.” A range of options for randomizing the data can easily improve the security, but Nohl said that the carriers have varied widely in how well they implement protection.

Each GSM command is exactly 23 bytes long. In most cases, Nohl said, that leaves room for carriers to send random data that makes the messages harder to intercept. However, some messages use the full 23 bytes, requiring a more sophisticated workaround to make things secure.

In Morocco, for example, one carrier sends messages with no attempt at encryption whatsoever.

“That doesn’t happen in Europe,” Nohl said. “However, we are still very far away from reasonable protection.”

It’s also hard to guess which networks are best-protected without studying them.

“It’s pretty unpredictable which network will be configured how,” Nohl said. While Vodafone did pretty well on its British network, its German subsidiary has a less secure network.

Nohl said the vulnerability is limited to the oldest 2G variant of the GSM networks, but since all GSM phones support the 2G network, that leaves all such phones vulnerable.

Although Nohl’s research focused on European countries, along with Morocco and Thailand, carriers elsewhere could be vulnerable unless they use better encryption than their European counterparts. Representatives for AT&T and T-Mobile USA were not immediately available for comment.

Nohl told AllThingsD that he will release a tool on Tuesday for people to check the vulnerability in their area. Nohl hopes volunteers will help quickly fill in the gaps, showing globally how vulnerable or not various networks are.

However, it appears the higher-end Lumia 800 could also be headed to the U.S. market soon. The Finnish cellphone maker on Wednesday received regulatory clearance from the Federal Communications Commission to start selling that device.

The Lumia 710 also made an appearance in the FCC database in the days before its formal announcement by T-Mobile. In that case, Nokia and T-Mobile were kind enough to include a user manual that indicated which carrier was getting the device.

Although Nokia’s filing includes a manual, this time the company wasn’t so generous with its photos, which didn’t indicate which carrier was getting the phone.

While Dish has a chunk of airwaves, or spectrum, that would fit nicely with AT&T, the two companies don’t appear to be best friends. Dish was one of the more vocal critics of AT&T’s T-Mobile deal, and the satellite TV operator appears to have wireless ambitions of its own, making it more of a direct rival to AT&T.

Read the rest of this post on the original site »

Sprint CEO Dan Hesse

Shares of Sprint are rallying by about 6 percent in after-hours trading, on word that AT&T has abandoned its $39 billion bid for T-Mobile.

That’s really only a jump of 13 cents per share — a figure that says a lot about the pickle in which Sprint remains, despite the fact that its arguments against the AT&T-T-Mobile combination have prevailed.

Sprint no longer has to deal with the threat of a merged AT&T-T-Mobile. But it still has to cope with the fact that it is a distant No. 3 to AT&T and Verizon Wireless. And, after betting on a different 4G technology, the company also has to bring up an entirely new network, all while trying to turn off its older Nextel network.

Still, there is some cause for celebration, an opportunity that Sprint did not let go to waste.

“From the beginning, Sprint has stood with consumers who spoke loudly and clearly that AT&T’s proposed takeover of T-Mobile would create an undeniable duopoly that would have resulted in higher prices, less innovation and fewer choices for the American consumer,” Sprint said today in a statement, in which it also praised federal regulators for their opposition to the deal.

Sprint and its CEO, Dan Hesse, had opposed the deal mightily before government regulators and Congress, and in the court of public opinion, investing a lot of political capital in the process.

That said, the deal’s failure doesn’t exactly help Sprint out of the messy spot it’s in.

For one thing, Sprint is still losing money. In its most recent quarter, it booked a $301 million loss on revenue of $8.3 billion, which was an improvement over the prior year’s period. On the bright side, it added 1.3 million customers — and that was before it had Apple’s iPhone in its stores to help entice new customers.

But while having the iPhone is nice, it’s not helping the bottom line. As The Wall Street Journal reported in October, Sprint has committed to buy more than 30 million iPhones, which will cost it as much as $20 billion over time, and on which it expects to lose money through at least 2014.

And that’s not even the half of it. Sprint also plans to spend big to build a new LTE network in 2012, and currently relies on WiMax as its 4G technology. With $5 billion in cash and short-term investments on its balance sheet as of the end of December, Hesse said, the company will have to go to the credit markets and borrow to get the build-out done.

Meanwhile, its relationship with the wireless broadband concern Clearwire isn’t exactly helping. Clearwire is the provider of Sprint’s 4G technology, and relies heavily on Sprint for its funding. By using Clearwire’s WiMax technology, Sprint was first to the market with 4G, something that gave it an early advantage over its rivals. But that the move also left Sprint alone as both AT&T and T-Mobile Verizon joined numerous carriers in Europe in moving to a rival 4G technology, known as Long-Term Evolution, or LTE.

Had Sprint not started the move to LTE, it likely would have faced an increasingly tough time getting device makers to bring out their latest and greatest devices for a WiMax standard that few other carriers were adopting.

So for Sprint, while one important battle is won, the war to turn the company around — and it will be a tough one — is far from over, and far from victory.

Update: Initially I identified T-Mobile as going launching an LTE network, which it’s not. I meant to say Verizon. Sorry about that.

AllThingsD’s Ina Fried contributed to this report.

While the carrier gets valuable spectrum, a roaming agreement and $3 billion in cash, the future of the No. 4 U.S. carrier is cloudier than ever, now that AT&T has called off its planned purchase.

T-Mobile has been operating as something of a lame duck since AT&T first proposed its $39 billion acquisition in March. Consumers, employees and potential partners have all been writing the carrier off, assuming that it would soon be swallowed up by its far-larger rival.

The abrupt turn of events will send T-Mobile and its parent company back to the drawing board, which will include soliciting new buyers, figuring out a strategy for its next-generation network and coming up with some inducements to avoid losing even more customers.

The blow of the breakup is only softened by the fact that the Bellevue, Wash.-based carrier will be handed a huge chunk of spending money to ride out the near-term bumps.

As T-Mobile looks to come up with Plan B, here are some potential options:

Spectrum sharing: As part of the breakup, AT&T has entered a mutually beneficial roaming agreement with Deutsche Telekom. Terms of the agreement have not yet been shared, but there could be some pretty compelling outcomes.

In Europe, it is common for carriers to share spectrum and even the cost of maintaining the network and towers. From the consumer’s perspective, it’s two different networks and two different brands. The carriers only end up competing on handset offerings, price and features — not coverage.

Another merger: T-Mobile will entertain any and all offers. Most recently, Dish said it was interested in partnering with T-Mobile if its merger with AT&T fell apart. Other candidates could include Sprint, or other companies from the media industry that are always sniffing around wireless, such as cable operators.

A bid from a company like Google or Microsoft would definitely make things interesting. While both are less likely candidates, they could use the network to push their agenda, including handsets and applications.

A total overhaul: The $4 billion breakup fee could give Deutsche Telekom the confidence to take another shot at the U.S. market. Probably not, but there’s always a chance. The company’s roots have been entrepreneurial and scrappy, but it’s been awhile since it has been able to make an impact on the market.

Worst-case scenario: Deutsche Telekom passes out the cash as a dividend to stockholders. It has always leaned on the U.S. as a moneymaker, and this could be no exception.

The 4G conundrum: Regardless, T-Mobile still does not have enough spectrum to update its network to the next generation. It may gain access to AT&T’s 4G network as part of the roaming agreement with AT&T, but both companies will arguably need more spectrum to keep up with demand.

The only two options will be to partner with Clearwire or LightSquared, or to wait until the next government auction. Both Clearwire and LightSquared are always in need of more cash, and have their difficulties. A deal with Clearwire would be additionally complicated by the fact that Sprint owns nearly half of the company.

AllThingsD’s Ina Fried contributed to this report.

In a statement, AT&T said it had made the move after consulting with T-Mobile parent Deutsche Telekom, and criticized the actions that forced it to abandon the deal.

“The AT&T and T-Mobile USA combination would have offered an interim solution to this spectrum shortage,” AT&T said. “In the absence of such steps, customers will be harmed and needed investment will be stifled.”

In addition to federal regulators, Sprint had vehemently opposed the deal, as had other smaller competitors and public interest groups, arguing it would hurt competition.

AT&T will have to pay a giant breakup fee to Deutsche Telekom, as well as enter into an expanded roaming agreement. AT&T said it would take a $4 billion charge in the fourth quarter to account for the cash and spectrum owed to the German telecommunications firm. The charge reflects $3 billion in cash and the $1 billion book value of spectrum owed, though many have placed the value of the spectrum at far more than its book value.

Despite the windfall, the move still leaves Deutsche Telekom without an exit plan for its U.S. holdings, and leaves T-Mobile without a clear path to offer higher-speed LTE service.

AT&T announced its plans to acquire T-Mobile back in March, on the eve of the CTIA trade show in Orlando. It drew almost immediate opposition from Sprint. The headwinds grew stronger as regulators began considering the deal and its potential impact on competition.

The companies had sought to see if there might be a way to offer concessions, but opponents seemed against any combination of the two, dimming the prospects for satisfactory concessions.

AT&T also failed on the political side, in addition to its regulatory chess moves. The company sought to withdraw its FCC application in hope of waiting for a court to rule on the Justice Department’s move to block the deal. However, the court in that case decided that with no FCC application pending it had no need to move quickly.

“People have a fundamental right to control their private information,” Franken said in a statement posted to his Web site. “After reading the companies’ responses, I’m still concerned that this right is not being respected.”

Franken said he is concerned that the average user of a phone running Carrier IQ’s software has no idea what information is being collected and who is getting it, or even the fact the software is running at all.

“I’m also bothered by the software’s ability to capture the contents of our online searches — even when users wish to encrypt them,” Franken said. “So there are still many questions to be answered here and things that need to be fixed.”

In addition to his statements, Franken’s office also released the responses from Carrier IQ, AT&T, Sprint, Samsung, and HTC. The senator says he still hopes to hear from T-Mobile and Motorola by Tuesday.

Sprint, for example, said it began installing the software on devices in 2006 and has put it on about 26 million devices, though only 5 percent of those phones are being asked to send data at any given time. AT&T said the software is installed on about 1 percent of its devices, or 900,000 phones, with 575,000 of those reporting data at any given time.

The carrier noted it has not used the software to profile customers or deliver ads but only to certify devices prior to launch and to review performance of the device and network after launch.

There’s a lot of other interesting bits of data in the response letters, each of which is posted as a PDF on Franken’s site.

Carrier IQ, which sent a response letter to Franken, has also tried to clear the air in interviews and in meetings with both the Federal Trade Commission and the Federal Communications Commission.

Update: Sprint said on Friday that it has decided to stop collecting data using the software.

“We have weighed customer concerns and we have disabled use of the tool so that diagnostic information and data is no longer being collected,” Sprint said in a statement. “At Sprint, we work hard to earn the trust of our customers and believe this course of action is in the best interest of our business and customers.”

Sprint CEO Dan Hesse

Sprint and the league didn’t disclose the size of the deal, though I am told it is fair to say that it is “in the millions” of dollars. Sprint replaces T-Mobile USA, which had been the league’s partner from 2005 until the end of last season.

As part of the pact, Sprint will offer its subscribers a new Sprint NBA Mobile app that will offer in-game and post-game video highlights, radio broadcasts of every game (including home and away radio broadcasts) as well as the usual assortment of news, scores and stats. Sprint says the app should be ready for Android by the time the delayed season tips off later this month. An iPhone version should be available at some point, though it may not have the exact same features.

Sprint subscribers who want even more basketball can get a 20 percent discount on the NBA’s mobile “League Pass,” which offers up to 40 out-of-market games per week.