AT&T Inc. (NYSE:T) has started offering its own contract-free plans through the Aio Wireless brand. Forbes contributor TJ McCue reports that the service was initially launched in May in Texas, Florida and the Atlanta, Ga. area. Thus far the carrier has been testing the service in a total of 11 different cities throughout the southern part of the country.

AT&T Wireless AIO

In the middle of September though, the company will roll the Aio brand out nationwide.

AT&T making a contract-free push

The new brand from AT&T Inc. (NYSE:T) offers plans which begin at $40 a month. Phones start at $49.99 and include the Prelude by ZTE or even a reconditioned iPhone 4 for $199. Consumers can also bring their own phone, which has quickly become an important part of prepaid and contract-free services like what Aio Wireless is offering.

Ina Fried of All Things D notes that AT&T already had its own prepaid brand called AT&T GoPhone. However, it looks like the carrier is trying to further separate itself from its prepaid counterpart by building up the Aio Wireless brand.

Growth in contract-free plans

There are indications that large carriers like AT&T are falling behind smaller ones because they have relied so heavily on contract plans. Smaller companies have learned how to use the networks provided by the big carriers and then offer consumers service for a fraction of the cost of contract plans provided by the big carriers. Some of the most well-known prepaid mobile companies are MetroPCS, which was just acquired recently by T-Mobile USA, TracFone and BoostMobile.

It makes perfect business sense for AT&T Inc. (NYSE:T) to roll out its own prepaid service because already a number of smaller companies are using the company’s network to offer prepaid service. Net 10 Wireless is one example of a company that offers prepaid service for as little as $50 a month, using AT&T’s network.