AT&T To Subsidize Wireless Phone Plans With Ads

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AT&T is considering wireless phone plans that put ads on your smartphone in exchange for a $5-$10 discount. Such ad-supported phone plans could arrive in "a year or two," CEO John Stankey said in an interview with Reuters on Tuesday.

"I believe there's a segment of our customer base where, given a choice, they would take some load of advertising for a $5 or $10 reduction in their mobile bill," Stankey said. He didn't offer any details on what kind of ads consumers would see and how they'd appear on phones.

AT&T considering ad-supported phone plans

Ad-subsidized mobile services aren't a new concept. Amazon's "Prime Exclusive Phones" program offered a discount on select mid-range phones in exchange for personalized ads on the lock screen. Virgin Mobile USA and Sprint's Boost Mobile have also tested ad-supported phone services in the past.

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However, those efforts didn't really click with consumers. AT&T is seemingly hoping things would be different now. The telecom giant had launched a brand-subsidized phone plan called "Sponsored Data" back in 2014. That program didn't pass on any monetary benefits to consumers, though. Instead, it let brands pay to deliver content to your phones outside of your data caps.

The new program, meanwhile, sounds somewhat different. It'll directly show ads on your phone in exchange for a discount on your monthly phone bills. Customers identified across multiple devices will see tailored ads on all their devices running on such plans.

Wireless phone plans aren't AT&T's only service to get an ad-supported discount in the near future. AT&T-owned WarnerMedia has already announced its plans of introducing an ad-supported subscription tier on HBO Max, the company's newest streaming service, early next year. HBO Max currently costs $14.99 for the ad-free version.

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Stankey says this will serve as a "foundational element" for AT&T's ad-supported wireless phone plans. It will provide new advertising inventory, and would be key to the upcoming program.

AT&T may sell its ads business

In addition to wireless phone services and media and entertainment services, AT&T also owns an advertising business called Xandr. It works with data outside of the company to tailor ads. However, the company is now considering selling the ad-tech business in order to reduce its debt load, Reuters reports citing people familiar with the matter.

This may have something to do with the company's plans of putting ads on consumers' mobile devices in exchange for a discount on their monthly bills. It will allow the company to continue harvesting data for ad-targeting and keep its advertising business running. More details on AT&T's ad-subsidized mobile phone plans should emerge in the coming months.

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