The real problem with unlimited data plans

This article may contain personal views and opinion from the author.
The real problem with unlimited data plans
Carriers are trying really hard to get everyone to move to some sort of tiered data plan, and it may not be for the reasons you think. Frequent readers know that the not everything is as it seems when it comes to unlimited data plans. Network carriers have pushed the “we must improve network performance for everyone else” angle, but cold hard facts have called that argument into serious question. While there are very real cases of network congestion caused by individuals who consume 50+ GB of "unlimited" data over a short period of time, studies show that the vast majority of unlimited users consume much smaller amounts of data than the equivalently priced tiered plans allow.

It turns out that even the vilified “top 5% of unlimited users” generally don’t exceed the amount of data available by tiered plans. Think about that for a second – customers with grandfathered unlimited plans tend to be among the longest standing and most loyal customers, yet in many cases they were getting their data throttled long before they had used as much data as a tiered customers is allowed to, even though both customers pay the same monthly rate.

The only reasonable conclusion is that carriers were trying to harass some of their best customers into changing to tiered plans, even though it would have essentially zero impact on network congestion. Recently, the big networks have relented somewhat; after being on the losing end of a very public small claims court decisions, as well as getting the sort of press coverage that makes corporate VP’s reach for the Pepto-Bismol, AT&T (long the worst offender) changed its policy, allowing unlimited data users to consume as much data as their tiered cohorts before getting throttled.

We certainly welcome AT&T’s move, but now that the “stick” of throttling is becoming less of a problem, the “carrot” of shared data plans is about to arrive. Shared data plans will be a boon to many, and will likely provide a compelling reason for many unlimited customers to switch. The ability to add a 4G tablet to your line without having to pay a separate monthly fee, or being able to put your spouse or children on your data plan will be very appealing to a lot of households.

But why should the carriers be so interested in saving you a little money (and therefore hurting their bottom line)? There are a couple of obvious answers; they can sell tablets that otherwise get sold in Best Buy or Apple stores. And if more people have smart devices that might translate to more people using V CAST, or the Verizon Navigator. But there’s actually a much bigger reason, and it has to do with revenue growth and basic math.

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