Why Verizon Dropped Its Unlimited Data Plan (And What You Can Do About It)

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Starting July 7, you’ll no longer be able to purchase an unlimited data plan through Verizon, which is moving instead to a “usage-based” model. This isn’t the first such move – AT&T dropped its unlimited data plan last summer – but it does seem to represent a tipping point for the industry. So what gives — and is there any way to avoid paying more for the same services?

Mobile phone companies have been ditching their unlimited data plans (which encompass streaming video and music, Internet use and e-mail) for a few reasons, but primarily because the amount of Internet traffic from phones has surged over the last few years  – and will continue to do so in the years ahead.

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According to Cisco, mobile traffic will grow 26-fold by 2015, and total mobile video traffic will expand to 197 million gigabytes over the next four years. That’s the equivalent of roughly 13 billion YouTube videos. In a letter to Verizon’s employees, the carrier’s higher-ups said that data usage had more than doubled in the past three years.

All that data has been weighing on the major carriers, which spent billions upgrading their services over the last several years to handle the increase in traffic. Verizon spent about $17 billion to improve its network, while AT&T spent $19 billion. Sprint also invested billions to launch its 4G network.

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Now they’re simply passing those costs on to consumers. AT&T currently charges $25 for 2 gigabytes of data per month. Tech blogs are reporting that Verizon will charge $30 a month for 2 GB, which is the price of its current unlimited plan. This leaves Sprint and T-Mobile as the only major carriers to continue offering unlimited data plans, but many analysts expect them to go to usage-based plans eventually as well.

So how can you avoid paying more?

First, be aware of how much you’re using. Both AT&T and Verizon have data calculators that you can use to determine how many e-mails you send, videos you watch, photos you upload and music you stream per month. (You might not realize just how much you’re on your phone until you actually calculate it.) That can help you determine which plan is best for you.

Second, consider switching to a phone that doesn’t require a contract. Virgin Mobile (owned by Sprint) sells a contract-free smart phone for $150 with unlimited data starting at $25 per month.

If you’re an existing Verizon customer, it looks like you will be able to hang on to your unlimited data plan – for now. The new usage plans, which will go into effect July 7, will apply to new customers so you should be able to get in under the wire if you signed up soon.

And finally, if you want to pay less, there are some fairly simple and convenient ways to use less of your data allotment without changing your media consumption habits. For example, you can download movies and music to your computer, and then upload them to your phone. Streaming as few as six hours of movies via Netflix can use up a 2 GB allotment. So while you might want to catch up on your Netflix queue while you’re leaving work, you may just want to wait until you’re on your home computer.

Correction: An earlier post stated that streaming as few as six Netflix movies can use up a 2 GB allotment. An estimated six to 12 hours of streaming movies can use up 2 GB.

1 comments
Armaced
Armaced

"So while you might want to catch up on your Netflix queue while you’re leaving work, you may just want to wait until you’re on your home computer." 
If I don't mind waiting until I'm home on my computer, why do I need Verizon in the first place?  Why should I pay to not use their service?