AT&T has launched Aio Wireless, a new data-centric, pre-paid brand aimed at the no-contract market recently marked out by T-Mobile USA.

The business is launching in the three US cities of Houston, Orlando and Tampa, before rolling out more widely over the next year. Aio will open stores under its own brand.

“We talked with no-annual-contract customers and created our service around what they want,” said Jennifer Van Buskirk, president of Aio Wireless.

“We are set up to win over value-conscious customers who are increasingly moving towards smartphones and mobile broadband,” she added.

T-Mobile USA launched its no-contract tariff plans at the end of March and rivals have since been studying the model.

Aio offers three tariff plans, as well as a portfolio of devices including smartphones, tablets and feature phones from vendors including Samsung, Nokia and ZTE.

Subscription prices range from $35 to $70 per month, with pricing varying by market. Download speeds are up to 4Mbps.

And users can bring their own unlocked devices for activation.

AT&T already has its own pre-paid brand called Go Phone, but Aio is pitched more at smartphone than traditional users.

The operator lost pre-paid subscribers in the first quarter and this move looks like an attempt to shore up that side of its business.