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AT&T Will Offer a Lower-Quality Video Option But Without a Discount

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After T-Mobile and Sprint introduced lower-cost wireless plans in return for customers accepting lower quality video streaming, AT&T is following suit. Sort of.

The second-largest wireless carrier said it would introduce a feature starting next year called “Stream Saver” to let customers voluntarily downgrade streaming video from any service—such as YouTube and Netflix—to DVD quality. But AT&T will not lower prices or give a discount to customers activating the lower-quality stream, which would use much less data than watching a typical high-definition video stream. The data used will also still count against a customer’s monthly data allowance.

AT&T emphasized that the feature, which will be turned on by default, was intended to help customers use less data, essentially stretching their monthly allowance to go further. Customers can opt turn off the feature at any time.

“Stream saver lets them enjoy more of what they love,” David Christopher, chief marketing officer in AT&T’s entertainment group, said in a statement. “And, they are in control—it’s their choice on how to use this innovative feature.”

The move by the big carrier to copy a popular feature of the two smaller, scrappier carriers—but without following suit on price—seems to be one of the new trends in the wireless market. AT&T and Verizon, the nation’s largest carrier, are fighting to hold onto their customers amid a market that has stopped growing much. But they don’t want to give in on price and dent their enviable profit margins.

It’s not clear if the tactics will succeed, however. Last quarter, AT&T (T) lost a net 268,000 regular, monthly phone subscribers, also known as postpaid customers. Verizon (VZ) lost 36,000. Meanwhile, Sprint (S) added 347,000 and T-Mobile (TMUS) added 857,000.

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T-Mobile started the first program that included downgraded video. A year ago, it introduced Binge On, a program that let customers stream as much video as they wanted from participating Internet services without counting against monthly data allowances. The program quickly signed up almost all of the major video services such as HBO (TWX), Netflix (NFLX), and YouTube (GOOGL).

Then this summer, both T-Mobile and Sprint introduced new, lower-priced unlimited data plans that defaulted to DVD quality for all video streaming. Full HD-quality video was available for a higher price.