Competition Is Making Unlimited Mobile Data Plans Even Better

Feb 17, 2017

The asterisks and caveats on all those new unlimited wireless data plans are shrinking away amid fierce competition between the big carriers.

After Verizon finally got in the unlimited game, this week T-Mobile and Sprint started eliminating some of the admittedly minor gotchas from their plans. And with AT&T on Thursday opening up its unlimited plan to all customers, prices are under pressure as well.

On Verizon's new unlimited plan, which starts at $80 for one line, customers can watch video in high definition and use up to 10 gigabytes per month for sharing a phone's high-speed LTE Internet connection with another device for tethering. Customers who use more than 22 GB per line in total in a month may see download rates shrivel as they can be "deprioritized" when in congested areas of Verizon's network, however.

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Giving customers the ability to watch HD video, instead of downgrading automatically to DVD quality, and the 10-GB tethering allowance prompted rapid responses from Sprint and T-Mobile. The two smaller carriers said their unlimited plan customers could now watch HD video if they wanted at no extra charge and upped tethering limits to match Verizon's allowance. AT&T's plan, which used to be available only to its DirecTV and U-verse customers, already allowed HD video, though it does not allow any tethering.

Consumers obviously get the benefits of the competition, though few people opted to watch HD video over DVD quality on the small screens of their phones when given a choice in the past on other carrier plans. And only a tiny fraction of wireless customers ever use the tethering feature.

Unfortunately, the biggest caveat has yet to touched by competition and that's the hidden data limit in all the unlimited plans. T-Mobile (tmus) and Sprint (s) have not changed their deprioritization allowances, which were already more generous that what Verizon (vz) offered. Sprint customers can use up to 23 GB per line in a month before the threat of slow data rates kicks in, while T-Mobile lets customers go up to 28 GB. AT&T's (t) 22-GB threshold is the same as Verizon's.

The deprioritization policies are meant to protect the carriers from extreme data hogs who might, for example, want to replace their home broadband connection with a wireless unlimited plan. Carriers stopped offering unlimited plans six years ago, largely because their networks were being overwhelmed by exploding smartphone usage. Now network capacity is much greater, but it still couldn't handle the traffic from truly unlimited data usage.

And while some users gripe about the limits, getting occasionally deprioritized to a slow speed is a far better alternative than being hit with the hefty overage fees carriers charge if a customer exceeds the monthly allowance on many of the older, limited data plans.

Meanwhile, for consumers who care most about price, Sprint has been slashing its rates. The carrier's usual unlimited plan price ranges from $60 for one line to $150 for four lines. But it's now pitching one line for just $50 or up to five lines for $90, though the super low prices last for 12 months before the regular rates return.

T-Mobile last month also effectively cut prices by eliminating added surcharges and taxes as additional fees. That can cut a customer's bill by 10% or more compared to the other three carriers, which still tack on the fees.

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