Confused By All These New Unlimited Mobile Data Plans? Here’s What’s Up

Image courtesy of Adam Fagen

It’s amazing what competition can do to a marketplace: In the span of a week, all four national wireless carriers have either introduced, enhanced, or dropped prices or restrictions on unlimited data offerings for mobile customers. But that’s a lot of change all at once — so what does it mean for you, the actual subscriber?

The Offerings

All four national carriers — Verizon, AT&T, T-Mobile, and Sprint — now have some kind of new or improved unlimited data plan on the table. They’re similar, competing against each other on price, but don’t all offer the same benefits or work the same way.

For example, although both AT&T and T-Mobile permit unlimited data customers to access HD video, they each have a throttling program — Stream Saver and Binge On, respectively — that will be enabled by default, and that subscribers have to toggle off. Some plans allow you to use your unlimited data device as a hot spot, to tether your laptop or other internet-using device to; others don’t. And if you’re interested in hooking up a wearable gadget or car to your data plan, those are different levels of cost at each carrier, too.

[Update Feb. 27, 2017: AT&T updated its plan, dropping prices and adding tethering to better match the competition.]

Here’s a short, basic summary of what each is offering:

Verizon AT&T T-Mobile Sprint
Cost for one line: $80 $100 $70 $50***
Cost for two lines: $140 $140 $100** $90***
Cost for four lines: $180 $180* $160 $90***
Possible throttling point: 22 GB 22 GB 28 GB 23 GB
Tethering included? 10 GB Prohibited 10 GB 10 GB
HD video included? Yes; by default Yes; must enable Yes; must enable Yes, up to 1080p^
E-billing mandatory? Yes No Yes Yes
Auto pay mandatory? Yes No Yes Yes
Extra taxes / fees? Yes Yes No Yes
New or existing customers? Both Both Both New only

* Promotion details: AT&T will charge the full $220 — $40 each for lines two, three, and four — for two months, then start providing a bill credit for the difference.

** Promotional offer; may expire later.

*** Promotional offer; lasts until March 31, 2018. After that point, one line will be $60; two will be $100, and four will be $130.

^ Sprint specifies that it caps streaming music at 1.5 Mbps, and streaming gaming at 8 Mbps.

It’s also worth knowing that none of these “unlimited” plans are truly endless. Every one of them has a data usage point — 22 or 23 GB of data per month — above which the company reserves the right to throttle your service if needed for network management purposes. That’s not a guarantee they will cut you off or drop your network connection to 3G or 2G speeds, when you cross that threshold, but they might.

But Do You Even Need Unlimited Data?

T-Mobile doesn’t offer any postpaid metered plans; its T-Mobile One is it for everyone. But if you’re going with another carrier, you might want to think carefully about whether you even need or want an unlimited plan, or if a different option would be better for you.

Verizon still offers its 2 GB, 4 GB, and 8 GB data plans for less than the cost of its unlimited plan per month.

AT&T offers 1 GB, 3 GB, 6 GB, and 10 GB plans for less than the cost of its unlimited plan — but still has several plans between 16 GB and 100 GB that cost more.

Sprint has a variety of shared line and single line plans that have lower data limits — 1 or 3 GB for the single lines, 6 or 12 GB for family plans — at lower price points than the regular rate for its unlimited offering.

So the questions for each consumer to decide are: How much data do I typically use, and how much am I willing or able to pay?

Single adults, or a couple, who have WiFi at home and in the office and aren’t on the road much probably aren’t using very much data in a given month. On the other hand, a family of four, where everyone is always on the go and several family members stream video and audio for a while every day, is probably using a lot more. And if you don’t have fixed broadband at home or at work, and only use your phone for internet access — as roughly 12% of Americans currently do — then everything you do eats away at your phone data.

So make sure to assess your needs realistically. Look at your bills for the last six months or the last year, and think about when you went near or over your data limit, and when you didn’t. Are you often paying overage charges? Do you always have more than 50% of your data left unused at month’s end?

Then, too, think about if there are times you did or didn’t do something explicitly because of your data cap. All together, those data points can help you make the most cost-efficient choice for your needs.

Why Is Everyone Changing Plans Now?

When former FCC chairman Tom Wheeler constantly emphasized the role of competition as a necessary part of consumer good, this is why.

T-Mobile, with its ostentatious pink blazing “uncarrier” announcements, had significant customer and revenue growth in 2016, picking up more than 8 million total new customers.

Verizon grew, too — but less spectacularly, picking up an extra 2.3 million post-paid customers. And AT&T picked up 6.2 million new customers in the United States.

Here’s the thing about those customer pickups, though: At this point, they pretty much only come from other carriers.

As recently as 15 years ago, in 2002, roughly 60% of American adults had some kind of mobile phone, the Pew Research Center finds. That means that there was tremendous opportunity for every business to grow: just reach the other 40% of American adults. Almost half!

But as of November, 2016, Pew found that the number of American adults with some kind of mobile phone is now up to 95%. That’s a mature marketplace; there’s basically no room for meaningful growth.

That means in order to keep growing as a company — and to keep generating more revenue, and more value for shareholders — a mobile carrier needs to get new customers by peeling them off from the competition. And in order to do that, a carrier has to give you a reason to change.

That kind of cutthroat competition leads to positive change for consumers, who can start seeing prices decrease and service quality, benefits, or plan options increase. Companies now have a reason to fight each other for your attention and your dollars, and when companies fight that hard, the consumer has a much higher chance of being the winner.

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