By Sinead Carew
NEW YORK, Jan 6 (Reuters) - AT&T Inc plans to giveconsumers options to save money on mobile data fees as soon asthis quarter while offering sponsors a new way to enticeconsumers to use their services.
The company announced details on Monday at AT&T's developerconference at the Consumer Electronics Show in Las Vegas. Theoffering will let sponsors subsidize consumer data fees, whichhave gradually become more expensive in recent years as phonecompanies charge for mobile web-surfing based on how much datatheir customers download.
AT&T, the No. 2 U.S. mobile operator, compared the offeringto 1-800 telephone services where businesses such as floristspay for inbound calls with a view to attracting more consumers.
It will start with deals from companies including a healthinsurer, an advertiser and a software firm but may expand tobusinesses ranging from media companies to retailers.
AT&T and its leading rival Verizon Wireless have both talked about the idea of offering sponsored data fortwo years, but the plans have been slow to materialize as theoperators sought partners and worked out how best to offer theservice.
AT&T's first partners include insurer UnitedHealth Group Inc, Boston-based advertising start-up Aquto andOrlando-based mobile software developer Kony Solutions.
It said the offering could also work well for retail, media,entertainment and financial services customers or could be usedby employers aiming to sponsor their own workers' data usage forcertain corporate applications.
Under the new service, AT&T said data charges from use ofsponsored content would be billed directly to the sponsor and will appear on the consumer's invoice as sponsored data.
For example, AT&T said that UnitedHealth customers couldview healthcare information or videos from their insurer withoutincurring data or customers using Aquto's service could watchads without incurring data fees.
Kony customers, which include hoteliers, could potentiallyuse its reservation systems to let customers book hotel roomswhile on the go without having to pay AT&T for the airtime.
Mark Collins, AT&T senior vice president for voice and dataproducts, said the service would complement existing dataservices for cost-conscious customers.
Collins declined to disclose financial arrangements for theservice but said that agreements would differ between sponsorsdepending on their agreements and that some companies willengage in revenue-sharing deals with the operator.
ReconAnalytics analyst Roger Entner said UnitedHealth was agood launch partner for AT&T because it could provide animportant service by giving lower-income consumers easier accessto key health information.
"Consumers will like it. Americans always like 'free',"Entner said.
COMPETITION
But on Monday, congresswoman Anna Eshoo, a member of theHouse of Representatives Communications and TechnologySubcommittee, warned that such a system could harm competition.
The "program by AT&T puts it in the business of pickingwinners and losers on the Internet, threatening the openInternet, competition and consumer choice," she said in astatement. "It's exactly why net neutrality rules came to existin the first place and why these rules should apply equally toall forms of broadband Internet service."
"On its face, the ability for consumers to access'toll-free' content seems like long-awaited relief fromfrustrating data caps. But embedded in programs of this type areserious implications for fairness and competition in the mobilemarketplace."
Jan Dawson, analyst at Jackdaw Research worried that unlessAT&T provides strong safeguards there could be potential forfraud if providers of bandwidth-hungry applications falselyclaim to be offering sponsored data.
But he said that the service was an important milestonesince it would mark the first time an operator would chargesomeone other than its customers for its data services.
"It will have the biggest impact for applications involvingvideo, since that's the biggest driver of bandwidth consumption,but it will be useful for other services too," Dawson said.
AT&T said sponsored data will be delivered at the same speedas any non-sponsored content. It will provide more details alongwith executives from the three sponsors it named to an audienceof developers and media at the CES show in Las Vegas.
Vodafone (VOD)
