One of the simplest of the new breed of mobile plans with unlimited data just got considerably more complicated, making it harder for consumers to choose the best plan for their needs.
Verizon, which debuted a single unlimited plan back in February, on Tuesday announced it was splitting its offering into two revised plans for consumers starting August 23. While one plan, dubbed Go Unlimited, was slightly cheaper than the original, it included more limitations, like downgraded quality for streaming video. The more expensive new plan, called Beyond Unlimited, threw in some additional perks, like free roaming in Mexico and Canada. Customers who previously chose the original plan can stick with it, at least for now, Verizon said.
The change follows moves by T-Mobile and AT&T to offer multiple unlimited plans, as well. The goal is to offer the most budget-conscious customers a lower price in return for service limits that help the carriers save bandwidth. Customers who want the best service pay more. It’s an effort to keep the most popular feature of the new plans–the freedom from worrying about monthly data allowances–without overwhelming the carriers’ networks, as happened a decade ago when unlimited plans first appeared.
The carriers mostly eliminated that first round of unlimited plans as app-happy smartphones users became ubiquitous and threatened to overcrowd the wireless networks. But as competition in the market has intensified, a new round of low-cost unlimited data plans returned starting last summer with lower prices. Still, some carriers have had trouble making up for lost revenue from overage charges they collected on the old monthly limited data plans.
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Verizon’s original plan from February, which cost $80 for one line rising to $180 for four lines, let customers watch high-definition video and use their phones to share the high-speed Internet connections by tethering to other devices like a laptop at full speed up to 10 GB per month. Customers who used more 22 GB per month overall could see their data rates slowed in busy areas. The deal wasn’t the cheapest on the market, but had some of the best features and the fewest caveats.
Verizon’s new Go Unlimited plan starts at $75 for one line rising to $160 for four lines. Streaming video is limited to DVD-quality and sharing an Internet connection via tethering is slowed to just 600 kbps, or about 1/33rd the speed of an average mobile connection, according to Speedtest. Also on the cheap plan, a phone’s regular Internet connection can be slowed by an undisclosed amount at any time when in a busy area, not just after a customer uses 22 GB in one month, as under the original plan.
The constant risk of slower download speeds makes the plan hard to compare to AT&T’s cheapest plan, called Unlimited Choice, which costs from $60 to $155. AT&T downgrades video to DVD quality and caps overall speed at 3 Mbps, about 1/7th average download speeds. T-Mobile’s cheapest unlimited plan, called T-Mobile One, downgrades video quality but doesn’t slow data speeds at all unless a customer uses more than 32 GB in a month.
At the more expensive end, Verizon’s new Unlimited Beyond plan costs from $85 to $200. No slowdowns will occur until a customer uses 22 GB in a month and tethering is at full speed. Video isn’t degraded to DVD quality, though Verizon says it will reduce the highest-quality HD, 1080p, to a slightly lower HD level of 720p on phones, but not tablets. The 1080p to 720p drop on phones will even apply to customers who stay on the original unlimited plan.
AT&T’s more expensive plan, called Unlimited Plus, starts at $90 and goes up to $185. It includes HD video as a free option, full speed tethering, free roaming service in Mexico and Canada, and no slowdowns in busy areas until a customers uses 22 GB. T-Mobile’s One Plus plan goes from $80 to $200 and includes similar features with a slowdown threshold of 32 GB. T-Mobile also adds no fees or taxes to the price, which can add another 10% or so to other carrier’s bills.
Sprint is the last carrier remaining with just one plan. Its Sprint Unlimited plan costs from $60 to $160. (Though the carrier is running a promotion of $100 for up to five lines for the first year.) The plan includes HD video and full speed tethering, though bandwidth can be limited for gaming and music play and in busy areas after a customer uses 23 GB in a month.
Verizon’s decision to throttle the quality of streaming video will likely further fuel the debate over how well its network has handled the surge of usage from unlimited plan customers. The carrier has said it has seen no impact from the new plans, backed by recent data from network testing firm Rootmetrics. But rivals, particularly T-Mobile CEO John Legere, have pointed to data from OpenSignal and others that appeared to show a slowdown at Verizon.
The addition of a cheaper plan could also indicate that Verizon (vz) was running into competitive pressure in the marketplace after a strong early start. “Verizon’s introduction of a low-end price plan might also be an early indication that the benefit of offering Unlimited in February is finally starting to fade,” analyst Walter Piecyk at BTIG Research noted on Tuesday. “We are also weeks away from the possible launch of a new iPhone, which provides an opportunity for share shifting within the industry.”