The wireless industry’s unlimited data plans come with a couple of caveats, but T-Mobile is easing one of the most infamous restrictions.
The carrier said customers on its unlimited plan could use as much as 50 GB per line per month without their download speeds being throttled—or slowed—in busy areas at busy times. T-Mobile’s new limit, the highest in the industry, is up from 32 GB previously and more than twice the 23 GB “de-prioritization” threshold of its nearest rival, Sprint (S).
AT&T (T) and Verizon start throttling at 22 GB in busy areas. Both AT&T and Verizon also have discounted unlimited plans that can throttle speeds all the time.
All of the carriers’ unlimited plans let customers use as much as data as they want without additional fees. But all of them use throttling to protect their networks from congestion by slowing speeds to deter major data hogs.
The increased limit gives T-Mobile a marketing advantage at little cost, since few customers ever get anywhere near its ceiling of monthly usage. T-Mobile says the limit is set to cover at least 99% of its customers’ average data use.
A customer could stream two hours of Netflix a day and not reach the threshold, chief technology officer Neville Ray noted in a blog post.
In general, competition over pricing in the wireless market appears to have eased recently. In January, T-Mobile (TMUS) eliminated add-on fees and taxes, giving its customers effectively about a 10% price cut. And in February, Verizon introduced its unlimited plan starting at just $80 per month. But since then the tide has turned. T-Mobile raised prices and Verizon (VZ) split its plan into a cheaper, more restricted plan and a more expensive plan.
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The newer deals and promotions, like T-Mobile’s increased data threshold, seem aimed at attracting customers without cutting into revenue the way that simple price cuts hurt industry revenues earlier this year.
Even the popular tactic of attracting customers with deals on new phones has become less generous. For example, most of the deals the carriers have offered on the new iPhone 8 so far require the trade in of a used smartphone with a value almost equal to the discount customers get on their new iPhone.
