Looking at the U.S. wireless industry over the past couple of years seems to be indicating one thing to me: At some point in the future, truly unlimited data plans will die. Speaking at the Re/code conference yesterday, Sprint’s CEO Marcelo Claure stated that – although unlimited works really well for Sprint now – at some point, it will stop offering unlimited data plans. As the carrier partners to offer more content to watch online, unlimited would have to go. At some point.
He didn’t say when, but he did offer a timeframe of 18 months to 2 years when the carrier’s network would finally be on par with the likes of Verizon and AT&T. You can view that interview clip with Walt Mossberg and Ina Fried below:
This got me thinking about a few things we’ve seen happen with T-Mobile over the past year or so. Firstly, T-Mo raised its truly unlimited Simple Choice plan from $70 to $80 per month. Secondly, during the last Uncarrier announcement, John Legere announced that customers are guaranteed their unlimited data for a minimum of 24 months. Giving us a soft timeframe, perhaps a warning, as to when unlimited might disappear. Thirdly – and much more recently – more customers seem to be experiencing the effects of data prioritization or traffic management. So perhaps the network can’t handle it?
Right from the outset, let’s make one thing clear: All of T-Mobile’s Simple Choice plans are technically unlimited. You can use as much data as you like, and you never get charged overages. You can even use (2G/EDGE) data abroad. As an Uncarrier move that’s never going to change. T-Mo just has different tiers for using high-speed or 4G LTE data. Once customers get to their individual limit, their speed drops. They don’t have to worry about adding tons of extra charges on to their bills. And that is awesome.
But as T-Mobile continues to outgrow the competition, adding more postpaid phone subscribers than anyone and porting in more from other carriers than are leaving to go the other way, it’s going to put a severe strain on the network. In fact, anyone keeping an eye on network reports from the likes of RootMetrics will see that in many markets T-Mobile’s speeds are dropping. It’s not a terrible drop in speed, in fact, T-Mobile’s are still among the fastest, particularly in the larger metro areas. But when a carrier is adding between 1-2 million new customers every quarter, that’s got to have an impact on its network performance. Even if this carrier does have more data capacity per user than any other. With some customers already seeing the effects of traffic management (some dropping to ridiculously slow speeds), can T-Mobile continue offering a “truly unlimited” 4G LTE data plan forever?
Marcelo Claure doesn’t believe Sprint can. But the question is – Does John Legere, or Neville Ray believe T-Mobile can? Has it got the network capacity to continue offering users the ability to use its 4G LTE as much as they like, whenever they like? Epstein over at BGR.com doesn’t think so. And I have to say, I’m concerned too. T-Mo is just starting to show the initial signs that it might need to plan a future without truly unlimited data. Maybe that’s why John Legere prepared us with the “minimum 24 months” thing a month or so back. Perhaps the company has subtly been warning us over the past 12 months that times are changing, and unlimited 4G LTE isn’t here forever. Whether that means it’s gone in 2 years, 5 years or 10 years, I’m still doubtful it’s staying for good.
What’s the most likely scenario? If T-Mobile was to end its true unlimited plan, what would replace it? The sensible choice – obviously – would be to introduce a plan tier which easily covers the majority of its customers. Let’s say that 97% of users don’t go over 20GB each month, does T-Mo introduce a 20GB high speed data Simple Choice plan? At least that way, those complaining of being “throttled” or de-prioritized will be aware they’ve hit an actual, concrete, transparent cap. It’s not guesswork. That, to me, makes most sense. We could then have four tiers, all with unlimited data but with different tiers of 4G LTE access – 2.5GB, 5GB, 1oGB and 20GB. Or maybe have five tiers and include a 15GB option too.
I want to hear from you. Do you think T-Mobile will end its truly unlimited plans as its subscriber base grows? If so, how long before they’re gone and how do you think the carrier might structure the plan tiers? Use the comments or tweet @TmoNews or me, @PhoneDog_Cam