AT&T's Aio (pronounced A-O) Wireless service is the company's answer to T-Mobile's 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.
Shopping for a phone plan? Read "Get the best cell phone plan for your family—and save up to $1,000 a year."
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 14 devices, ranging from a $30 Samsung Denim flip phone to a $550 Galaxy 4 S and a $550 iPhone 5 (no word yet on iPhone 5 S or iPhone 5 C availability). 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 service seems like a very good alternative to a traditional contract plan. But it should become more appealing as its selection of phones and discount options grow.
UPDATE: Aio Wireless service in now available online to all U.S. customers, and the carrier has retail outlets in 14 metropolitan areas concentrated in the southern states. High-speed data service now includes 4G LTE.