Unlimited Data Plans: Are They Coming Back From the Dead?

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Unlimited data, once a consistent option among cell phone carriers, has been on the outs lately with the big dogs of wireless. But fourth-place carrier T-Mobile is hoping to win back some users — and market share — by offering a true unlimited data plan starting Sept. 5.

The new T-Mobile plan will cost $90 per month for unlimited voice, text and data if you get a subsidized phone, or $70 per month if you pay full freight for your cellular device.  On T-Mobile’s older plans, users’ connection speeds would be throttled when they exceeded their monthly data limit, but the company promises that this plan will be truly unlimited.

The move runs counter to actions of industry leaders AT&T and Verizon, who have revamped pricing structures to better monetize users’ data needs. AT&T first began phasing out unlimited data for smartphone users in 2010, and Verizon eliminated the option for new subscribers in 2011. Now both companies are launching data-share plans to encourage families to purchase a pool of data and use it for all of their smartphones, laptops and tablets. The cheapest option, for a single smart phone with 1GB of data per month, will run you $85 with AT&T and $90 with Verizon. Meanwhile, third-place carrier Sprint offers unlimited data, voice and text for $110 a month.

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“The growth in usage and potential revenue is really in data,” says Wayne Lam, a wireless communications analyst at IHS Technology. “All those all-you-can eat data programs were sort of a necessary evil to entice users to use the iPhone.”

How much data does a person need, exactly? According to a Nielsen study, the average smartphone user only used 435 megabytes of data per month in early 2011. However, as smartphones become more powerful and network speeds increase, more and more subscribers are becoming “power users,” utilizing the phones’ multimedia capabilities. According to Verizon’s data usage calculator, streaming an hour of music and watching a five-minute video on YouTube each day will put you more than a gig in the hole by the end of the month.

By offering unlimited data, T-Mobile hopes to bring back some of the hundreds of thousands of subscribers who have abandoned the carrier in the last year. They may need a better slate of phones for that to happen though—currently, T-Mobile is the only major carrier without the iPhone. “A combination of unlimited data and Apple iphone would help them turn things around,” Lam says.

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Still, it seems unlikely that the new plan will sway AT&T and Verizon, who have almost 200 million American subscribers between them and the most robust mobile networks, to do the same. Verizon hauled in $6.9 billion in revenue from mobile data in the second quarter of 2012, an 18.5 percent increase from the days of unlimited data a year earlier. “This is a long-term strategy for Verizon and AT&T and they’re not going to change that path,” Lam says.

According to Lam, unlimited data will be tough to maintain in the long term as users’ consumption needs increase. “This whole notion of unlimited data is, for all practical purposes, unsustainable,” he says. “The only way to grow is to start charging for data just like any other utility.” Sprint, who has marketed their unlimited data plan heavily, admitted to The New York Times that it wasn’t necessarily a permanent solution.

For now, though, users will retain the option to watch cat videos and post photos to Instagram without fear of overage fees from the two smaller wireless companies, and the renewed attention on T-Mobile will likely keep the sector’s near-duopoly in check a while longer.

MORE: 5 Lingering Questions About Shared Data Plans

16 comments
mobilefortyniner
mobilefortyniner

Solavei rocks!   www.mobile49er.com

Who cares how someone spells?  Geez.

sbaker58
sbaker58

Ok you guys who reccomend Solavei. Have you read their website and looked at their grammer? Below is a message I sent to them about just one sentence they have on their front page. I would suggest you read their front page and look at all the sentence and grammer errors. One sentence is towards the bottom of the page. My message to them is listed below:I was looking at your website and though it all sounds good, if you cant even spell on your website, why would someone trust you? Look at the below sentence that is on your site. Can you guess what is wrong with it? How about the 2nd word! Shouldn't it be "it"?Here is the sentence--> Isn't is time to join a community of "people" instead of a "corporation"?I saw at least one more sentence with an incorrect word on it and several areas where there should be comma's etc. So if you want to start a company you better know how to spell and write a correct sentence! Or at least proof read it. Here is the website in case you guys on this site don't believe me and are thinking of signing up with them. I would guess they are from another country. http://www.bluemountainsage.com

Vicente Lopez Fuentes
Vicente Lopez Fuentes

" Meanwhile, third-place carrier Sprint offers unlimited data, voice and text for $110 a month"Get your facts straight, My Sprint bill is $95 with taxes and fees, Sprint's plan is $79.99

Chad Chatagnier
Chad Chatagnier

Flat rate is certainly sustainable if the carriers would not simply toss every single user into the highest rate speed.  What they should do for the benefit of everyone is price according to the actual bandwidth.  Similar to cable or DSL.  Want a faster rate, pay more.  It's very simple and can obviously be done as carriers have introduced that infamous "throttling".  Not a single reason this couldn't be implemented instead of this unfriendly and unpopular capping.  

John Whiting
John Whiting

Bandwidth is cheap.  ATamp;T and Verizon are just greedy.

Neo65
Neo65

I'm part of a new network in the USA that will launch on Sept. 21st called Solavei. It will truly give 4G speeds with unlimited DATA for only $49. If you're interested in signing up, please email me at: neomodusnetwork@gmail.com and If you introduce this service to just 9 of your family or friends, you get the service for FREE. It's a new day folks in wireless communications-- A REVOLUTION...

Neo65
Neo65

I'm part of a new network in the USA that will launch on Sept. 21st called Solavei. It will truly give 4G speeds with unlimited DATA for only $49. If you're interested in signing up, please email me at: neomodusnetwork@gmail.com and If you introduce this service to just 9 of your family or friends, you get the service for FREE. It's a new day folks in wireless communications-- A REVOLUTION...

Michael
Michael

Looking for an inexpensive cell phone plan, Blue Mountain Sage (through Solavei) is offering unlimited data, text, and talk for $49 per month, no contract. See www.bluemountainsage.com for more information.

tekeek
tekeek

I have two phones on the unlimited with Sprint. My total bills is $167/mo. The sprint unlimited plan is 69.99/79.99 depending if you go with/with out 3G/4G.

empyrean_surfer
empyrean_surfer

I just recently discovered that my T-mobile plan (which is in a major city) is not really 4G but instead it is what is being referred to as 3.5G, whats worse is that most of the time my phone stays on the edge. Finally, even when it shows that I'm on 4G, many tools I have used reflect that it's actually 3G. PANTS ON FIRE!

Bill Cason
Bill Cason

That is a great article but I am moving to Solavei!  $49 unlimited talk text amp; web no contract!

StefaniaBelmondo
StefaniaBelmondo

Those prices are absolutely insane!

"The cheapest option, for a single smart phone with 1GB of data per

month, will run you $85 with ATamp;T and $90 with Verizon. Meanwhile,

third-place carrier Sprint offers unlimited data, voice and text for

$110 a month."

My operator over here in Finland offers only unlimited plans, the price depending on the speed you want. The slowest one is really slow, but costs only 5 euros a month, while the most expensive one I can get is full blown 4G, with a price of 20 euros a month. That's the most I can spend on data.

I know building infrastructure in a huge country like US can be costly, but there is something wrong with those prices.

Farley101us
Farley101us

A lot of Euorpean wireless carriers don't follow a phone subsidy model however. What did you pay for your smartphone? If it was more than $250-$300, you likely paid the full retail cost. U.S. carriers subsidize their phone pricing by $300-$450, which they make back over the first 12 months of a two-year contract. Hence the higher prices...

Andri Agassi
Andri Agassi

But do they reduce the price after the first 12 months? I guess not...

Here in Indonesia we pay around $10/GB/month at the very most.

Franc012
Franc012

...says Wayne Lam, a wireless communications analyst at IHS Technology.

“All those all-you-can eat data programs were sort of a necessary evil

to entice users to use the iPhone.”Giving customers what they want is evil???  Did people really need to be enticed to use the iPhone?  I'm pretty sure tons of people would have still bought the iPhone, even if 3G technology had not yet been invented.  I hope these greedy cell phone providers go belly up.