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AT&T Aio Wireless no-contract cell service: What you need to know

Consumer Reports News

AT&T's new Aio Wireless (pronounced A-O) service is the company's answer to T-Mobile's recent radical switch to simpler, lower-cost, no-contract plans for phones and tablets. Like T-Mobile, Aio Wireless offers unlimited talk, text, and data without a contract, starting at $40 a month—much less than a traditional contract plan from AT&T and the other major carriers.

But Aio Wireless is just a baby step for Ma Bell, which continues to offer contract plans, unlike T-Mobile. AT&T is initially offering Aio service only in Orlando, Tampa, and Houston, though it promises "significant national coverage" by the end of 2014, according to an AT&T spokesperson. It's also limiting the choice of phones, albeit to a good mix that includes the Apple iPhone 5. And Aio users will be stuck in the slow lane of 4G networks: HSPA+, which, at 4 megabits per second, is about half as fast as AT&T's LTE network.

Given the increasing popularity of low-cost, low-hassle plans from T-Mobile and others, the sooner AT&T can deploy Aio Wireless nationally, the better.

Find the best smart phone for your needs and budget: check our cell phone buying guide and Ratings.

On Aio Wireless smart-phone customers have a choice of two no-contract plans: Aio Smart ($55 per month) and Aio Pro ($70 per month). There's also Aio Basic ($40 per month) for non-smart phones. All include unlimited data, text, and domestic voice minutes.

The difference among those plans is the point at which Aio throttles high-speed data access, which greatly slows down your online activities. For example, throttling begins after 7GB of data are consumed on Aio Pro, after 2GB on Aio Smart, and after just 250MB on Aio Basic. But you can buy an extra gig of high-speed access for any phone for $10, either on a monthly basis or as you need it. Another $10 option lets you place unlimited calls and text messages (including MMS) to foreign-based friends and relatives.

By comparison, T-Mobile's $70 unlimited plan has no stated throttling limits. T-Mobile's cheapest plan, available for all phones, costs $50 and includes 500MB of data per month, and its 2GB data plan actually costs $10 more than Aio's. Another difference: T-Mobile offers discounts for multiple phones, which Aio doesn't yet offer.

In terms of phones, Aio currently offers 12 devices, ranging from a $30 ZTE feature phone to a $650 iPhone 5. But more are coming. In-store buyers (not online) have a device-leasing option offered through an independent company that allows them to pay off their device over a 12-month period. Of course, you can also bring your own phone, as long as it's unlocked and compatible with the AT&T network.

Aio Wireless also offers an Android-based tablet from ZTE for $180, though the data rates are identical to what's offered on AT&T.

Bottom line: Aio Wireless is one of the best ideas to come out of AT&T in a long while. But until it becomes nationally accessible—with a greater selection of phones and 4G LTE data access—that's all it will be.

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