The competition among wireless carriers has historically been fierce. The market is huge—most modern humans have smartphones, or would like to buy one—but the ways that the various major mobile carriers have to differentiate themselves are scant. Furthermore, once a customer has signed up for a contract and committed themselves to a carrier, they are unlikely to switch anytime soon due to sheer inertia, as well as an aversion to change that requires paperwork and admin.
This search for a competitive edge amongst mobile providers could be a reason why we’re seeing the return of the unlimited data offer. The major US carrier Verizon recently brought back the deal offering unlimited talk, text, and data for just $80 per month, instead of charging its customers per gigabyte of data used, as it did before. Its competitors, Sprint and T-Mobile, did something similar over the summer, bringing unlimited data plans back to life. But all these offers come with a catch—there are some restrictions on every so-called “unlimited” plan, which tells us something about the state of the mobile market right now.
Indeed, what Verizon’s new customers may not know is that the idea of unlimited mobile data has a murky history. It’s historically been limited by a few bad actors who abused the system by using their mobile plans for outrageously data-hungry practices, which slows down the network for everyone else. As the tech blog BGR put it, “First things first: there is no such thing as an unlimited plan. Sorry, US consumers, but it’s a fact. After having done away with unlimited plans years ago, every major cellular carrier in the country now offers some form of “unlimited” wireless plan now. And in each and every case, the unlimited plan is, well, limited.”
In the case of Verizon’s plan, the caveat is that above a certain number of gigabytes, usage is “throttled”. That is, the company only offers its users up to 22GB of data at the full 4G LTE speeds. If you gobble up over 22 GB binge-watching House of Cards, then the company “may prioritize usage behind other customers in the event of network congestion,” thereby slowing down the rest of your data usage considerably at peak usage times.
As BGR went on to point out, Verizon is not alone in implementing this throttling caveat: “Every other major wireless carrier in the US has the same policy, though the throttle threshold varies. AT&T guarantees 22GB of full-speed data per billing period as well, while Sprint promises 23GB and T-Mobile ups the figure to 28GB.”
So what exactly does it tell us about the mobile market if unlimited data is making a quasi-comeback? According to some, it tells us that an industry that until quite recently looked as if it was turning into a monopoly is now participating in an even more competitive marketplace. As Vox wrote about Verizon’s new offer: “This is probably not a move Verizon wanted to make. But Verizon’s hand was forced by its smaller rivals Sprint and T-Mobile, which introduced unlimited data plans last summer (albeit with some restrictions). It’s just the latest sign that competition is working in the wireless industry. It vindicates the Obama administration’s 2011 decision to block AT&T from acquiring T-Mobile — a move strongly supported by liberals.”
So now that anti-competitive legislation has brought on this new era of unlimited data, it’s worth asking which plan consumers should take advantage of. Well, in addition to looking out for the aforementioned difference in throttling thresholds, customers looking to switch to an unlimited data plan should watch out for other caveats, including the cost of adding another line (it can be way more expensive), the required payment method (Verizon requires a direct debit or checking account, so you can’t accrue points or air miles with a credit card), and whether there are any other additional setup or administrative fees associated.