When are carriers going to offer a data only plan?

by: Simon HillSeptember 20, 2012
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You’ve got to hand it to them. Carriers are really good at making money. Whatever it is you want to use they’ll work out the most expensive way to charge you. As our data demands grow, the carriers are moving the goalposts once again. The new shared data plans from AT&T and Verizon want to meter your data usage. A lot of people are wondering why there’s no data-only plan available on the market for smartphones. Well, you can rest assured that it’s coming soon, but will it be affordable? Not if the major carriers have a say.

Growing demand for data

There’s been a huge shift in the way we use mobile devices. We used to make phone calls (remember them?) and send text messages. Smartphones and tablets enable us to do so much more. The experience of web browsing on an old mobile phone was incredibly tedious. Games were basic, cameras were poor, apps were limited to simple calculators, and Facebook didn’t exist.

Nowadays we use our mobiles for all sorts of things and as our demand for voice minutes and texts has gone down, our demand for data has soared. A recent O2 study found that calls are now the fifth most popular activity on smartphones behind web browsing, social networks, playing games, and listening to music.

Death of unlimited data

Naturally the carriers have spotted this trend and their response has been to kill off unlimited data deals and switch plans around. You’ll now find unlimited calls and texts are common, but data is metered and so the more you use, the more they will charge you. Verizon and AT&T are trying to force their customers onto these new plans and claiming that unlimited data is unfeasible.

It’s worth pointing out that many carriers used to advertise “unlimited data” when what they actually meant was “limited data”. Here in the UK many standard contracts claimed to offer unlimited data and then included a “fair usage policy” in the fine print which effectively triggered throttling or a cut-off on your mobile data if you exceeded a monthly limit. That limit was often surprisingly low.

Better tech, the growth of 4G, and VoIP

Now we are in a situation where our smartphones are capable of providing a great online experience. We can browse full version websites, we can play online multiplayer games, and we can stream video. These are all key features used to drive sales of devices. On top of that the carriers have been improving their technology. Some of the enhanced 3G networks offer impressive speeds already and 4G is rolling out to bring us speeds that could enable real-time streaming of true HD video with no wait involved.

Combine that with existing VoIP service like Skype and the possibility of VoLTE services which are in development. Throw third-party BBM style apps and social media into the equation. What do you get?

We only need data

All of our needs can be catered for by a data only plan. Most of us aren’t using anywhere near our allowance for voice minutes and texts, but our data usage is creeping up all the time.

The barrier to you actually taking advantage of this new dawn in the mobile tech age is the crippling bills you’re going to get slapped with. Verizon and AT&T’s new plans are deliberately confusing and claim to offer advantages for you, the more devices you use. So you get charged for a shared bucket of data, you get charged for each individual device you add, and you get charged for any extra data you use at the rate of $15 per gigabyte (the old overage charge was $10 per gigabyte by the way).

At the same time you get unlimited calls and texts. Basically you can have an unlimited amount of something as long as you aren’t really using it much. When we didn’t use much data we got unlimited data on our plans, now that we don’t use many call minutes or texts we get them unlimited and data is metered instead.

These new metered plans are the probable face of data only plans.

The resurrection of unlimited data

Unlimited data looked to be a dead duck for a while there and virtually every deal claiming unlimited data actually had a “fair usage policy” that made it limited anyway, but we are now seeing some deals that claim truly unlimited data. This is largely an attempt by smaller carriers to compete with the big boys.

In the UK there’s Three, in the US there’s T-Mobile and Sprint, now offering truly unlimited data. There are plenty more that claim to, but actually apply limits. It’s also worth noting that none of the unlimited data deals allow tethering without at least making extra charges (so you can’t use your mobile as a hotspot). If you know of any other carriers with unlimited data deals in the UK, US, or anywhere else then post a comment and tell us about them. What carriers are offering good deals and what is your experience with them?

It will be very interesting to see if the big carrier’s argument that it is unfeasible to provide unlimited data will actually hold up. If they are telling the truth then we should see the carriers offering it going bust or being forced to change their deals.

Data only plans are coming

Back in June the AT&T CEO, Randall Stephenson, said

“I’ll be surprised if, in the next 24 months, we don’t see people in the market place with data-only plans…. I just think that’s inevitable.”

It’s no accident that data prices are going up as data usage goes up, even although improvements in technology and networks should be making it cheaper. The carriers have got to compensate for the falling revenue from calls and texts somehow.

You also have to consider the rise of the tablet market which creates a demand for data from devices that have no traditional call or text requirement or capability.

Who will be first to take the plunge and offer a data only plan? Place your bets.

  • cvgordo

    my contract is up with sprint and i’m checking out the other providers. for a single line verizon is charging $90 for ONE gb of data. it’s like they don’t want anymore customers or something.

    • Tech_Hottie

      Verizon knows you want data. (And you pay dearly for small amounts.)

      Verizon knows you don’t need unlimited voice minutes. (So you are forced to get it anyway.)

      I wonder what would happen if 1 million people all dropped their Verizon account on the same day.

  • Tech_Hottie

    > A lot of people are wondering why there’s no data-only plan available on the market.

    None on the market AT ALL?

    All tablets have to have a voice plan?

    • Simon Hill

      Yeah, I mean for smartphones, I’ve edited to clarify.

  • Erik Neu

    For all intents and purposes, T-Mobile’s $30 Prepaid Plan (no handset subsidy) that provides 5 Gb of data per month *is* a data-only plan. I agree, it is more the exception than the rule at this point, but it definitely is a sign of things to come.
    To an extent, though, the idea that a non-voice-user could save a lot of money with a data-only plan may be wishful thinking. The carriers have fixed costs and need a certain ARPU. They are going to try to get it one way or the other.
    It is sort of analogous to how everybody wants cable TV stations to be un-bundled. Their reasonsing is that they only use 4 out of 50 channels. If they could just pick the 4 they want, then their monthly bill should plummet (ideally, to 4/50s of its current level). It’s not gonna work this way. If it ever comes, it will be something like: (1) channel costs 1/2 of the full-fare, and each additional channel costs another 1/10. So (5) would be break-even.
    Oh, and if they do that, most likely the cost of the bundle will go UP.

    • Down With Blizz

      Bollocks. You pay the $30 and you get 200mb. You pay another $30 for a datapack THEN you get another 1.5gb.

  • germandude

    Wow that’s freaking expensive. For 2GB unlimited I only pay 13 bucks in Indonesia on a post paid plan. And I thought that was expensive.

    • Down With Blizz

      This is what annoyed me about UK Carriers. ‘2gb unlimited’ – If its 2gb, its not unlimited at all. Unlimited means as many gb as you can leech. Like what you used to get wtih 3 in Australia once upon a time before they realised the sheer amount of money in it.

      And yet carriers still claim to give ‘unlimited’ data plans that limit you.

  • marsbars2006

    If phone minutes are unlimited and no fair use policy is in place, can’t we, users with unlimited data plans still, argue that the unlimited data should be treated the same way. They shouldn’t be allowed to have two different definitions of unlimited.

    • It’s essentially false advertising but you can be sure they’ve included a loophole in the fine print somewhere. If people would complain enough or drop their service things might change but that’s a big might. Who honestly would cut their service off to institute a change? Not many. I just use wifi since it’s most everywhere now. All in all, insurance included, I pay 37$ a month with AT&T on contract unlimited talk and text with a measly 300MB of data that I’ve never went over. There are ways around the data rip-off but it sucks you even have to do that.

  • dogulas

    My question is when will device manufacturers make versions of their high end phones without the 3g/4g radios. Because they make the phones freaking expensive and I do everything over Wi-Fi anyway. Imagine a Nexus phone that beats the Galaxy S3 but costs only $300 unlocked and without a contract on the day it is released. Or…free with a carrier contract. That’s what I want. I just don’t care enough about mobile data to pay for both the hardware and the contractual forced monthly plan.

  • Tom

    Erik Neu hit the nail on the head. T-Mobile’s new Pre-Paid plan through Wal-Mart essentially is a data only plan, but just a little bit sweeter, since you do get 100 voice minutes + unlimited text for only $30 a month. Skype will be my primary for phone calls, and the 100 voice minutes will be the safety net in case data isn’t working. I’ve been waiting a long time for a data plan on a phone that didn’t break the bank, and its finally here. Now hopefully T-Mobile doesn’t yank the rug out from under us and take away the deal. Technically they could at any time, since its pre-paid.

  • Down With Blizz

    There is one, but sadly, it runs on the Optus network.
    Amaysim prepaid. Buy $10 credit, you can shift ALL of that credit to a $10 1gb datapack. If it wasnt for the fact that optus is such a crap network, id be a permanent Amaysim customer, they really are excellent value.

  • Dean Vincent

    This would be challenging in the market for VoIP and Telecom providers. Their intentions is to offer the unlimited subscription model. However with 4G increasing its services there is greater demand with faster connection speeds. Its good to get an idea of quantity of data usage.

    Dean, Sando Solutions Ltd.