Unlimited mobile data has been on and off several times in the US mobile market. There was a point where every major US mobile operator supported it - it worked well for attracting new customers and retaining existing ones. Users loved such plans as they did not have to worry about how much data they already used in the billing cycle or how much data will be used if their kids watch the next episode of ‘Lab Rats’ on their smartphone. It seemed to be a great way to sell data plans until the rise of video consumption or hotspot use on smartphones made the unlimited data plans unprofitable for operators. Operators addressed usage abuse by implementing fair-usage policies.
Fair usage policies allowed operators to put limits on how much data gets delivered before it got throttled. Fair usage policies were often targeted by regulators as violation of net neutrality or misleading. Operators often highlighted the drawbacks of their competitors in marketing campaigns. One by one all major US operators started killing unlimited data plans in favor of ‘data bucket plans’ where a fixed size bucket of data is sold for consumption during a fixed time period, e.g. 2GB for $20 for use during a 30 day billing cycle. The data bucket plans come with their own issues like - arguments about consumers ending up paying for data left unused at the end of a billing cycle, confusion about different consumption rates by different applications and the dreaded bill shock. Without going into too much into the details we can say that from a consumer perspective, data bucket plans leave a lot to be desired. Google’s Project Fi data pricing corrects a lot of shortcomings of data bucket plans but it is not clear if Project Fi like data plans will be offered by national operators.
Unlimited data – the return!
Mobile operators understand that consumers really want to use data without having to worry about overages. They don’t want arduous calculations about how much data will be used by an application and what impact it has on their data bucket. Unlimited data plans solve these problems and thus operators are bringing them back.
The new unlimited data tariffs move away from the one-size-fits-all policy of past unlimited data plans. The new offers have unlimited data options for regular users (e.g. Sprint Unlimited Freedom and TMobile One) and unlimited data options for power users (Sprint Unlimited Freedom Premium and TMobile One+). The new flavors of unlimited plans are structured by varying quality of service by service category, which in technical terms equates to speed of delivery by service category.
While we hear starkly differing views from operators on unlimited data plans - TMobile going ‘ALL IN on Unlimited’ and Verizon seeing no future of unlimited data plans, we believe both unlimited data and bucket plans will continue to grow as they attract different customer bases. We believe the unlimited data plans have a lot more room for innovation – the current move to create tiers of unlimited plans that deliver different quality of service by service category is just a starting point.
Operators are finding it a challenge to identify and categorize services by just examining the data travelling on their networks. To effectively deliver and categorize content, operators will partner with content providers and publishers and share relevant information. We saw this happening when T-Mobile launched BingeOn.
Content Providers and operators will equally benefit in this collaborative environment as their end goal is to provide the best possible user experience. So, if the content provider knows that a user has T-Mobile One or Sprint Freedom Unlimited plan, then they can limit the video delivery to 480p at the start of the video without waiting for the video algorithms to figure this out. This new partnership environment between the operators and content providers can also lead to new business and monetization opportunities, for example toll free data services.
Openwave Mobility provides solutions to help mobile operators builder closer relationships with third parties and thrive in an era of closer strategic collaboration with content providers. Our Traffic Management suite of solutions help operators build unlimited data plans with different quality levels for different service categories to maximize subscriber Quality of Experience. Our SmartIdM solutions help operators share subscriber identity securely and plan information with content providers in a privacy-compliant system.